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Friday 10 July 2015
Three Men Indicted in $1.7 Million Mortgage Fraud Scheme Involving Baltimore City PropertiesRead the Press Release
Baltimore, Maryland – A federal grand jury indicted three defendants on charges arising from the fraudulent purchase of seven properties in Baltimore, using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.7 million:
Cecil Sylvester Chester, age 68, of Mitchellville, Maryland;
Michael Gerard Camphor, age 59, of Baltimore; and
Christopher Andy Kwegan, age 58, of Randallstown, Maryland.
The indictment was returned on June 24, 2015 and unsealed today upon the arrests of the defendants.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.
“Mortgage fraud perpetrators steal from lenders that are induced to make loans that will never be repaid and damage neighborhoods when the resulting foreclosures drive down property values,” stated U.S. Attorney Rod J. Rosenstein.
Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland. Camphor had worked as a real estate agent for a company and also operated a real estate consulting business called Ron Gerard LLC, a/k/a Ron Gerard & Associates. Kwegan worked as a real estate agent for another company and also bought and sold residential properties on his own.
According to the 23 count indictment, from February 2008 to July 2009, the defendants identified houses in Baltimore that were for sale, many of which had been purchased and renovated by co-conspirator Andreas Tamaris. Tamaris owned and operated a company that purchased and renovated row homes in the Highlandtown neighborhood of Baltimore City. The three defendants set the purchase price for the properties to exceed their actual fair market value, thereby generating excess proceeds from the transactions from which they could profit.
Chester and Camphor persuaded individuals who were inexperienced with residential real estate transactions to allow them to use their names, identifying information and credit histories to purchase Baltimore row houses owned by Tamaris or otherwise located by the conspirators. The indictment alleges that Chester and Camphor advised these “straw purchasers” that they didn’t need to contribute funds for the down payment or closing costs to buy these properties. Chester and Camphor also advised that they would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed, and that Chester and Camphor would collect the rent, manage the tenants and make the mortgage payments.
Chester and Camphor are alleged to have provided false information about the straw purchasers’ employment, income and financial assets, as well as false and fraudulent supporting documentation to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans. Chester and Camphor falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase. Tamaris and other individuals, including Kwegan, supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.
The indictment alleges that following the settlement on each transaction in which they participated, the three defendants received substantial payments drawn from the proceeds of the loan. Few, if any, payments were made towards the mortgages, and each of the seven properties went into foreclosure, resulting in a loss of at least $1.7 million.
The indictment seeks forfeiture of at least $1,571,631 from Chester, $962,274 from Camphor and $242,500 from Kwegan.
All three defendants face a maximum sentence of 30 years in prison and a $250,000 fine for conspiring to commit wire and mail fraud and for wire fraud. Chester and Camphor also face a maximum sentence of 30 years in prison and a $250,000 fine for mail fraud. An initial appearance was held for Kwegan yesterday, and Camphor’s initial appearance is scheduled for 3:00 p.m. today, in U.S. District Court in Baltimore. Chester is expected to have his initial appearance in federal court in New York today.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
In a related proceeding involving two of the properties at issue in the instant case, co-conspirator Andreas E. Tamaris, age 44, of Bel Air, Maryland, previously pleaded guilty to one count of conspiracy to commit mail and wire fraud, and awaits sentencing.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/priorities_financialfraud.html.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI , HUD OIG - Office of Investigations and the U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.
Three Members of Matusiewicz Family Convicted of Federal Stalking Crimes Resulting in the Murder of Christine BelfordRead the Press Release
WILMINGTON, Del. – A federal jury has convicted David T. Matusiewicz, his mother, Lenore Matusiewicz, and his sister, Amy Gonzalez, of interstate stalking and cyberstalking, in violation of federal law. The jury also found all three defendants criminally responsible for the death of Christine Belford, who was murdered in the lobby of the New Castle County Courthouse by co-conspirator Thomas Matusiewicz on February 11, 2013.
The defendants, who will be sentenced by United States District Judge Gerald Austin McHugh on October 15, 2015, face a maximum sentence of life in prison. Following the completion of any prison term, the defendants face a maximum of three years of supervised release.
The jury’s verdict follows the August 2013 indictment charging David T. Matusiewicz, Lenore Matusiewicz, and Amy Gonzalez with one count of conspiring to commit interstate stalking and cyberstalking, in violation of Title 18, United States Code, Sections 371 and 2261A(1)-(2); two counts of interstate stalking, in violation of Title 18, United States Code, Section 2261A(1); and one count of cyberstalking, in violation of Title 18, United States Code, Section 2261A(2). This appears to be the first federal conviction of any defendant for cyberstalking resulting in death, in violation of the Violence Against Women Act.
According to the indictment and court documents filed in this case and in prior cases, David T. Matusiewicz and Christine Belford were engaged in divorce and child custody proceedings in the Family Court of Delaware in 2007. In August 2007, David T. Matusiewicz and his mother, Lenore Matusiewicz, kidnapped the three young children born of his marriage to Christine Belford and fled to South America. In March 2009, David and Lenore Matusiewicz and the young children were found living in a motor home in Nicaragua. David and Lenore Matusiewicz were arrested and prosecuted in Delaware, and the children were returned to the care of their mother, Christine Belford.
In September 2009, David and Lenore Matusiewicz both pled guilty to crimes relating to their kidnapping of the children. In December 2009, David T. Matusiewicz was sentenced to 48 months in prison to be followed by 5 years of supervision by the United States Probation Office.
In the days following his December 2009 sentencing, David T. Matusiewicz and Lenore Matusiewicz began to orchestrate, from their prison cells, a course of conduct designed to stalk, harass, and intimidate Christine Belford and her children. They enlisted Thomas Matusiewicz, Amy Gonzalez and various other persons in this effort, which stretched from December 2009 to February 2013.
The Matusiewicz family began their stalking campaign by broadly disseminating -- by mail, email, websites, Internet postings, and other means -- false allegations that Christine Belford had, among other things, abused her children, suffered from mental illness and attempted to harm Lenore Matusiewicz. They used a website, posted YouTube videos, and sent letters to Christine Belford’s church, her children’s schools, the family’s neighbors, friends and relatives repeating their false and defamatory allegations. Christine Belford and her children were placed in fear and suffered substantial emotional distress as a result of the Matusiewicz family’s widespread, public dissemination of this false and defamatory information.
In August 2011, the Family Court of the State of Delaware terminated David T. Matusiewicz’s parental rights as to his children with Christine Belford following a multi-day trial. In doing so, the Family Court rejected David T. Matusiewicz’s assertion that Christine Belford was abusing the children, referring to those allegations as “baseless” and “made up.” Following the completion of the Family Court termination of parental rights trial, the Matusiewicz family recruited and used a variety of people to conduct physical and online surveillance of Christine Belford and her children.
After his release from federal custody, David T. Matusiewicz resided in southern Texas, first with Amy Gonzalez and then with Lenore and Thomas Matusiewicz. Between September and November 2012, the United States Probation Office twice denied David T. Matusiewicz’s requests for permission to travel from Texas to New Jersey. On November 9, 2012, David T. Matusiewicz filed a petition to reduce the monthly child support arrearage payments he owed Christine Belford in the Family Court of the State of Delaware. That petition ultimately resulted in the scheduling of the February 11, 2013 court hearing. Christine Belford was ordered to attend that hearing in the New Castle County Courthouse.
On January 8, 2013, David T. Matusiewicz sought and received permission from the United States Probation Office in Texas to travel to Delaware to attend the child support arrearage hearing scheduled for February 11, 2013. David T. Matusiewicz never informed the probation officer that he intended to travel to Delaware with Thomas and Lenore Matusiewicz.
Between February 4 and 7, 2013, David, Lenore and Thomas Matusiewicz traveled from Texas to the Delaware Valley in two vehicles – a Honda Civic and Honda CRV – later found to contain numerous weapons, ammunition, restraints, an electric shock device, several gas cans, a shovel, and numerous pictures of Christine Belford’s children and residence.
On the morning of February 11, 2013, David and Thomas Matusiewicz drove to a parking garage near the New Castle County Courthouse in the Honda CRV, which contained ammunition, a military style knife, three sets of restraints of progressively smaller sizes, a bullet proof vest, an electric shock device, binoculars, and photographs of Christine Belford’s children and residence. After entering the courthouse lobby at approximately 7:30 a.m., David T. Matusiewicz entered and stayed in the security screening line, while Thomas Matusiewicz moved around the lobby, occasionally approaching and talking to David T. Matusiewicz.
Shortly before 8:00 a.m., David T. Matusiewicz passed through courthouse security screening and walked to another floor of the building. Thomas Matusiewicz remained in the lobby, where he shot Christine Belford multiple times as she entered the courthouse lobby, killing her. He then shot Laura Mulford multiple times as she attempted to flee. After a shootout during which he shot and injured two Capitol Police officers, Thomas Matusiewicz died on the sidewalk of the courthouse of a self-inflicted gunshot wound.
On February 15, 2013, Amy Gonzalez filed a petition for custody of Christine Belford’s three children in the New Castle County Courthouse, which houses the Family Court of the State of Delaware. The check written to pay the filing fee to the Family Court was dated February 12, 2013 – the day after the Courthouse murders.
This case was investigated by the Federal Bureau of Investigation and the Delaware State Police, and is being prosecuted by Assistant United States Attorneys Jamie M. McCall, Edward J. McAndrew, and Shawn A. Weede.
Three Bronx Gang Members Sentenced to Life in Prison in Manhattan Federal Court for Racketeering, Murder, Conspiracy to Murder, Attempted Murder, Narcotics, and Firearms ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that CARLOS LOPEZ, 27, was sentenced on July 7, 2015, and FELIX LOPEZ-CABRERA, 25, and LUIS BELTRAN, 27, were sentenced on Wednesday, July 8, 2015, for racketeering, murder, conspiracy to murder, attempted murder, narcotics, and firearms charges. LOPEZ and LOPEZ-CABRERA were each sentenced to life in prison plus 35 consecutive years. BELTRAN was sentenced to life in prison. LOPEZ, LOPEZ-CABRERA, and BELTRAN were sentenced for charges arising out of their involvement, from 2003 through 2012, in the criminal activities of the Bronx Trinitarios Gang (“BTG”), a violent street and prison gang that engaged in drug trafficking and multiple acts of violence, including murder and attempted murder, throughout the New York region. All three were convicted after a 12-week jury trial before U.S. District Judge Paul A. Engelmayer, who imposed the sentences.
In imposing sentence, Judge Engelmayer stated that “it doesn’t get more serious than premeditated murder, murder in cold blood,” and that the murders in this case had left a “permanent hole” in the lives of surviving family members of the murder victims, several of whom spoke at the sentencing hearings about the impact the defendants’ crimes have had on their lives and their families.
According to the Superseding Indictment and evidence admitted at trial:
The BTG operated primarily in the Bronx, New York. It started in the prison system in the late 1980’s and subsequently spread to the streets. LOPEZ-CABRERA was a member, and a leader, of the BTG who directed other members to carry out illegal and other activities as part of the racketeering conspiracy. As part of their membership and participation in that enterprise, LOPEZ-CABRERA and LOPEZ murdered Raffy Tavares and Irving Cruz, both 19, in the vicinity of 81 East 181st Street, Bronx, New York, on May 23, 2010. BELTRAN and LOPEZ-CABRERA murdered Raymond Casul, 23, in the vicinity of 271 West Kingsbridge Road, Bronx, New York, on March 31, 2009. LOPEZ-CABRERA was also involved in the September 4, 2009, murder of David Avila-Gomez, 23, in the vicinity of 15 Mount Carmel Place, Yonkers, New York. CARLOS LOPEZ was also involved in the November 20, 2010, murder of Freddy Polanco, 19, in the vicinity of 75 West 190th Street, Bronx, New York. LOPEZ-CABRERA, LOPEZ, and BELTRAN also carried out multiple assaults and attempted murders of individuals believed to be members of rival gangs, including the Latin Kings, Dominicans Don’t Play, and the Bloods. LOPEZ-CABRERA and LOPEZ also participated in a more than decade-long conspiracy to distribute kilograms of marijuana and crack cocaine in the Bronx. The evidence at trial also showed that LOPEZ-CABRERA, LOPEZ, BELTRAN, and other members of the BTG possessed, brandished, and discharged a number of firearms in connection with their drug trafficking and racketeering activities with the Trinitarios gang.
FELIX LOPEZ-CABRERA was convicted of one count of racketeering; one count of racketeering conspiracy; two counts of conspiracy to murder in aid of racketeering; four counts of murder in aid of racketeering; two counts of assault and attempted murder in aid of racketeering; one count of conspiracy to distribute or possess with intent to distribute 100 kilograms and more of marijuana, 28 grams and more of crack cocaine, quantities of cocaine and oxycodone; two counts of discharging a firearm in furtherance of a crime of violence or a drug-trafficking crime; and four counts of discharging a firearm in connection with the murders of Raymond Casul, Raffy Taveras, Irving Cruz, and David Avila-Gomez.
CARLOS LOPEZ was convicted of one count of racketeering; one count of racketeering conspiracy; two counts of conspiracy to murder in aid of racketeering; three counts of murder in aid of racketeering; one count of assault and attempted murder in aid of racketeering; one count of conspiracy to distribute or possess with intent to distribute 100 kilograms and more of marijuana, 28 grams and more of crack cocaine, quantities of cocaine and oxycodone; two counts of discharging a firearm in furtherance of a crime of violence or a drug-trafficking crime; and three counts of discharging a firearm in connection with the murders of Raffy Taveras, Irving Cruz, and Freddy Polanco.
LUIS BELTRAN was convicted of one count of racketeering conspiracy; one count of conspiracy to murder in aid of racketeering; one count of murder in aid of racketeering; and one count of discharging a firearm in connection with the murder of Raymond Casul.
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In addition to the prison sentences, LOPEZ, LOPEZ-CABRERA, and BELTRAN were sentenced to five years of supervised release.
Since 2009, as part of “Operation Patria” and “Operation Green Haze,” this Office has charged at least 147 members and associates of the Trinitarios Gang.
Mr. Bharara praised the work of the New York City Police Department’s Bronx Gang Squad, the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ Joint Firearms Task Force, the Drug Enforcement Administration, and Immigration and Customs Enforcement’s Homeland Security Investigations.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Jessica Ortiz, Rachel Maimin, Micah W. J. Smith, Nola B. Heller, Sarah Krissoff, and Matthew Laroche are in charge of the prosecution.
Thornton resident sentenced to 97 months in federal prison for pssession of child pornographyRead the Press Release
DENVER – Kevin Dale Harlow, age 55, of Thornton, Colorado, was sentenced earlier this week by U.S. District Court Judge Wiley Y. Daniel to serve 97 months (just over 8 years) in federal prison for possession of child pornography. Following his prison sentence, Harlow was ordered to serve 10 years on supervised release and register as a sex offender. Further, he was ordered to pay $22,000 in restitution to several victims of his crime (children who were pictured in the child pornography). Harlow, a member of a Lutheran Church leading a 6th grade boys confirmation class, possessed 3,257 unique child pornography images and 316 unique child pornography videos.
The sentence was announced by U.S. Attorney John Walsh and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Denver Special Agent in Charge David Thompson. Harlow was indicted by a federal grand jury in Denver on November 4, 2014. He pled guilty before Judge Daniel on April 23, 2015. He was sentenced on July 7, 2015.
According to the stipulated facts contained in the plea agreement, an ICE HSI special agent, working in an official capacity conducting online undercover investigations, was able to access a specific peer-to-peer file-sharing network. The special agent was able to obtain a list of files reportedly being shared, including 36 files with names indicative of child pornography. Approximately 15 files depicting child pornography were downloaded through the peer-to-peer file-sharing network by the undercover special agent on that date.
During the investigation it was determined that the files were being shared from a residence in Thornton, Colorado. In March 2013, the same undercover agent was able to download an additional 26 files of child pornography that were being made available from the same residence. While the investigation continued, an ICE HSI agent learned that a Sergeant from the Johnstown Police Department had also initiated an investigation related to the specific address targeted by ICE HSI. The Johnstown Sergeant was also using a law enforcement computer to conduct online undercover activities. The Sergeant was able to download over 80 image files and more than 15 video files all consistent with child pornography.
Based on this information, a federal search warrant was obtained and executed at the Thornton residence of Kevin Harlow. It was determined that Harlow was a member of a Lutheran Church and was a leader for the 6th grade boys confirmation class. When the search warrant was executed, Harlow was in the process of downloading child pornography. Numerous computers and digital media were seized during the search warrant execution. The investigation also revealed that the search terms Harlow used included: teens, preteens, girls, boys, and ages such as 7, 9, and 12. Investigators learned he had a preference for images of children between 10 and 14 years old.
The forensic examination of the computers and digital media seized from Harlow reflected that child pornography was possessed on more than 10 of the devices recovered. These devices contained 3,257 unique child pornography images and 316 unique child pornography videos. The National Center for Missing and Exploited Children (NCMEC) reported that 554 of the image files possessed by Harlow depict minor victims previously identified to law enforcement. Some of the material portrayed sadistic or masochistic conduct or other depictions of violence.
“Children are victimized in the production of child pornography, and people who possess child pornography fuel that victimization,” said U.S. Attorney John Walsh. “The tough sentence handed down by the court in this case is further supported by the fact that this defendant was working closely with children and young people at the same time he was engaged in the collection of child pornography.”
“This significant prison sentence represents the serious criminal nature of child pornography, and the resulting permanent trauma inflicted on its young and helpless victims,” said David A. Thompson, special agent in charge of HSI Denver. “Our HSI special agents are specially trained to identify, locate and pursue prosecution against these child predators, and rescue their victims.”
This case was investigated by HSI along with the Johnstown Police Department.
Harlow was prosecuted by Assistant U.S. Attorney Alecia Riewerts, the Project Safe Childhood Coordinator for the District of Colorado.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Syracuse Man Indicted for Social Security FraudRead the Press Release
SYRACUSE, NEW YORK – Blair A. Taylor, 50 of Syracuse, New York, was arraigned in federal court on July 9, 2015, on various charges related to a scheme to defraud the Social Security Administration (SSA) of more than $87,000, announced United States Attorney Richard S. Hartunian and Edward J. Ryan, Special Agent in Charge, Social Security Administration, Office of Inspector General.
The three-count indictment charges Taylor with theft of government money, making a false statement in an application for Social Security Disability Insurance Benefits (DIB) and concealing employment income while also receiving DIB payments.
The indictment alleges that Taylor applied for DIB in April 2006, claiming he was totally disabled. Between April 2006 and January 2015, SSA paid Taylor approximately $87,138.90. The indictment alleges that Taylor received income from various jobs using a second Social Security number which would have affected his eligibility for benefits. The indictment also alleges that in September 2010 Taylor filed an additional disability claim under the second Social Security number. This included an allegedly false report that he had not previously applied for benefits from SSA.
If convicted, Taylor faces up to ten years in prison on the theft of government money charge, up to five years in prison on the Social Security fraud charges, a forfeiture money judgment of up to $87,138.90, and a fine of up to $250,000.00 for each count.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the Social Security Administration, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Michael F. Perry.
Sunrise Man Sentenced to 20 Years in Prison for Payroll Tax Fraud SchemeRead the Press Release
Sonny Austin Ramdeo, 35, of Sunrise, was sentenced today to 240 months in prison, followed by 3 years of supervised release in connection with a $20 million federal payroll tax fraud scheme. Ramdeo was also ordered to pay restitution in the amount of $21,442,173.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), made the announcement.
Ramdeo previously pled guilty to two counts of wire fraud and money laundering, in violation of Title 18, United States Code, Sections 1343 and 1956(a)(1)(B)(i).
According to statements made in court and court records, from as early as 2005, defendant Ramdeo was employed as the payroll supervisor at Promise Healthcare, Inc. (Promise Healthcare) and Success Healthcare Group (Success Healthcare), both of which owned and operated hospital facilities throughout the United States. As payroll supervisor for these two companies, Ramdeo was responsible for overseeing the payment of bi-weekly wages and related payroll taxes for approximately 4,000 employees. While employed as a payroll supervisor, Ramdeo facilitated a $20 million dollar federal payroll tax fraud scheme. To execute this scheme, Ramdeo incorporated PayServ Tax Inc., and thereafter represented to officers and employees of Promise Healthcare and Success Healthcare that his company would handle the transfer of local, state and federal payroll taxes to the proper agencies. Instead of forwarding all of the monies due to the taxing authorities for employee payroll taxes, Ramdeo stole and embezzled the funds resulting in a $21 million dollar underpayment. By stealing the payroll tax money, Ramdeo caused hospitals to lay off employees, adversely impacted the maintenance and operations of seventeen acute care hospitals, jeopardized services provided to patients, challenged investors’ security, and reduced the amount of money the taxing authorities actually collected.
Court records indicate that Ramdeo kept the taxes paid by Promise and Success Healthcare to PayServ for his own personal use. These stolen monies included employee and company wages. Ramdeo used the proceeds from this fraudulent scheme in order to finance a now defunct charter airline company.
U.S. Attorney Ferrer stated, “Sonny Ramdeo abused the trust bestowed upon him as a payroll supervisor. By stealing payroll taxes for his own personal gain, Ramdeo adversely impacted private citizens and companies. His selfish acts were rightly punished with the imposition of a significant federal sentence.”
“Sonny Austin Ramdeo portrayed himself as a business man who promised his clients that he would file and remit payroll taxes to the proper agencies. He didn’t,’ said Michael A. D’Alonzo, Assistant Special Agent in Charge, FBI Miami. “Instead, he was blinded by greed and apparently unconcerned about the plight of the thousands of people he bilked to the tune of $20 million in losses.”
Kelly R. Jackson, Special Agent in Charge, IRS Criminal Investigation, stated, “Sonny Austin Ramdeo was responsible for paying local, state and federal payroll taxes to the proper agencies on behalf of thousands of employees, but instead selfishly stole the money for his own personal use. As seen in this case, the failure to pay over withheld payroll taxes is a serious offense that can have severe consequences for both employers and the employees of the affected businesses. Let Ramdeo’s actions and lengthy sentence serve as a warning to those who are considering similar conduct.”
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and HHS-OIG. This case is being prosecuted by Assistant U.S. Attorney Ellen L. Cohen.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Statement from U.S. Attorney Dana Boente on the McDonnell OpinionRead the Press Release
RICHMOND, Va. – Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, provided the below statement regarding today’s opinion issued by the U.S. Court of Appeals for the Fourth Circuit:
“We are pleased with today’s ruling affirming the conviction of former Virginia governor Robert F. McDonnell. I would like to thank the appellate team for their efforts on this very challenging case: Assistant U.S. Attorneys Richard D. Cooke, Michael S. Dry, Jessica D. Aber, Ryan S. Faulconer, and Deputy Chief David V. Harbach II of the Criminal Division’s Public Integrity Section. I would also like to thank special agents with the FBI’s Richmond Division, the Virginia State Police, and IRS-Criminal Investigations for their hard work and commitment to this case.”
Robert F. McDonnell, 60, of Glen Allen, Virginia, was sentenced Jan. 6, 2015, to two years in prison, followed by two years of supervised release, for soliciting and obtaining payments, loans, gifts and other items from Star Scientific, a Virginia-based corporation, and Jonnie R. Williams Sr., Star Scientific’s then chief executive officer, in violation of federal public corruption laws.
A copy of this press release and others related to this case may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No.3:14cr12.
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South Portland Man Pleads Guilty to Gun ChargeRead the Press Release
Contact: David B. Joyce
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Sean Johnson a/k/a “Thomas Butler” a/k/a “Wayne Sunderland,” 32, of South Portland, Maine, pleaded guilty yesterday in U.S. District Court to being a felon in possession of a firearm.
According to court records, on May 23, 2015, Johnson pulled alongside another vehicle with two occupants stopped at a traffic light located at the intersection of Payne Road and the Maine Turnpike Approach/Connector Road in Scarborough. Johnson fired a shot into the vehicle missing both occupants and lodging in the driver side door. He fled down Payne Road. A passing motorist reported the incident by calling 9-1-1. Scarborough police officers responded and located Johnson’s vehicle parked in a driveway a short distance away. Johnson was found and arrested hiding in nearby woods. A police K-9 led officers to Johnson’s firearm, a Glock nine millimeter semi-automatic pistol that was buried under leaves near his vehicle. Johnson was prohibited from possessing firearms due to a 2013 felony drug trafficking conviction in Maine.
Johnson faces up to 10 years in prison, a $250,000 fine and three years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
This case was investigated by the Scarborough Police Department and the Southern Maine Gang Task Force, which is comprised of comprised of agents and officers from the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Drug Enforcement Administration; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the Portland and Biddeford Police Departments.
Rowlett Man Admits Mailing More Than 400 Hoax White Powder LettersRead the Press Release
DALLAS — A Rowlett, Texas, man, appeared today in federal court this morning before U.S. District Judge Sidney A. Fitzwater and pleaded guilty to an indictment charging several federal felony offenses stemming from the hundreds of white-powder hoax letters he mailed from North Texas, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Hong Minh Truong, 67, pleaded guilty to five counts of false information and hoaxes. He faces a maximum statutory penalty of five years in federal prison and a $250,000 fine for each of the five counts. Truong, who has been in custody since July 28, 2014, is scheduled to be sentenced by Judge Fitzwater on October 23, 2015.
According to the factual resume filed in the case, since December 2008, Truong mailed more than 400 hoax letters from the North Texas area to cities across the U.S. and to U.S. Embassies abroad. The initial letters, sent out on December 4, 2008, had a “Dallas, Texas” postmark and contained a white-powder substance. More than 15 batches of hoax letters were sent from the Dallas area from December 2008 to the present. In all but two batches of letters, a white-powder substance was included in the envelope.
The substance contained in the more than 400 letters in this case did not contain Anthrax; however, substantial governmental resources were expended in the response and investigation. Although each response was unique, every response involved multiple agencies dispatching personnel and equipment.
Truong mailed some of the hoax letters to the Mi Escuelita Preschool Crossover, in Dallas; Lockheed Martin Aeronautics in Fort Worth, Texas; the Empire State Building, in New York City; Fenway High School in Boston, Massachusetts; and the Dallas Morning News in Plano, Texas.
The U.S. Postal Inspection Service and the FBI investigated. Assistant U.S. Attorney Errin Martin is in charge of the prosecution.
Richmond Heroin Dealer Sentenced to 23 Years in PrisonRead the Press Release
RICHMOND, Va. – Jerome Russell Lockhart, aka “Rome,” 36, of Chesterfield, Virginia, was sentenced today to a total of 276 months in prison, followed by four years of supervised release, for distributing 38.5 pounds (17.5 kilograms) of heroin, being a felon in possession of a firearm, and for violating the terms and conditions of his supervised release.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Washington Field Division; and Colonel Thierry G. Dupuis, Chief of Police for Chesterfield County Police Department, made the announcement after sentencing by U.S. District Judge Henry E. Hudson.
Lockhart pleaded guilty on April 15, 2015, to a criminal information charging him with possession with intent to distribute heroin, and with possession of a firearm by a convicted felon. According to the statement of facts filed with the court, Lockhart began distributing heroin shortly after he was released from federal prison on a prior drug trafficking offense. His sentence was later reduced as a result of the Fair Sentencing Act, and he was released from federal custody in 2010 to begin serving a four year term of supervised release. Lockhart admitted to having distributed 17.5 kilograms of heroin during the last 2 ½ years, which resulted in two known overdoses that did not result in death. Lockhart was sentenced to 240 months on the drug charges, and 120 months on the firearm charge. Those sentences will run concurrently. Lockhart was also sentenced to 36 months for violating the terms and conditions of his supervised release. The 36 months will run consecutive to the 20 years, bringing the total prison time to 23 years.
This case was investigated by the DEA’s Washington Field Division and the Chesterfield County Police Department. Assistant U.S. Attorney Angela Mastandrea-Miller prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-0054-001-HEH.
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Prior Felon from Albuquerque Arrested for Violating the Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Jason Blackwood, 42, of Albuquerque, N.M., made his initial appearance in federal court this morning on a criminal complaint charging him with violating the federal firearms laws. Blackwood remains in federal custody pending a detention hearing scheduled for July 13, 2015.
The federal charges against Blackwood were announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Thomas G. Atteberry of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Bernalillo County Sheriff Manuel Gonzales III.
Blackwood was arrested this morning on a criminal complaint charging him with being a felon in possession of firearms and ammunition, possession of an unregistered saw-off shotgun, and using and carrying firearms in furtherance of a drug trafficking crime. Blackburn is prohibited from possessing firearms and ammunition because he previously was convicted on a robbery in a California state court.
The complaint alleges that on June 22, 2015, deputies of the Bernalillo County Sheriff’s Office (BCSO) executed a search warrant at Blackwood’s residence in the northeast heights of Albuquerque. During the search, the deputies seized five firearms, including a sawed off shotgun with no serial number, and hundreds of rounds of ammunition. They also seized approximately 41 grams of heroin, two grams of methamphetamine, and narcotics paraphernalia. Also on June 22, 2015, the BCSO also searched a storage unit allegedly used by Blackwood. From the storage unit, the deputies seized three more firearms.
If convicted for being a felon in possession of firearms and ammunition or possession of a sawed-off shotgun, Blackwood faces a statutory maximum penalty of ten years in prison. If convicted for using a firearm in furtherance of a drug trafficking crime, Blackwood faces a mandatory minimum penalty of five years in prison which must be served consecutive to the sentence imposed on other charges. Charges in criminal complaints are mere accusations. Defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the ATF office in Albuquerque and BCSO with assistance from the Second Judicial District Attorney’s Office. Assistant U.S. Attorney Shammara H. Henderson is prosecuting the case.
This case is being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
Partners in Scotts Valley Investment Company Sentenced to Prison for Fraud SchemeRead the Press Release
SAN JOSE – Keith Rode was sentenced yesterday to 70 months in prison and ordered to pay $32,880,811.82 in restitution for his role in an investment fraud, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson. The sentence brings a close the last of the three cases against the partners of Geringer, Luck, and Rode LLC, a Scotts Valley investment company.
Rode, 47, of Los Angeles, along with his co-defendants, John Geringer, 50, of Santa Cruz and Christopher Luck, 58, of Scotts Valley, pleaded guilty in 2014. Each defendant has acknowledged playing a role in an investment fraud scheme: Rode pleaded guilty to one count of mail fraud while Geringer and Luck each pleaded guilty to one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and one count of securities fraud. According to the plea agreements, Geringer, Luck, and Rode, each admitted they made false and misleading statements to induce people to make investments in a fund managed by the partnership. Specifically, at the end of April 2009, Geringer confessed to Rode and Luck that he had been falsifying the investment fund’s trading records for several years. Instead of terminating the fund or reporting Geringer to the authorities, Rode and Luck admitted they continued to recruit investors by making false and misleading statements to members of the public, including that the fund had a positive historical performance and that the fund made diversified equity trades.
In each of their guilty pleas, Geringer, Luck, and Rode acknowledged that these false and misleading statements were necessary to cause new investors to contribute to the fund and to induce existing investors to maintain their investments or furnish more money. The defendants also admitted that new investor money was critical to keeping the fund afloat and that if they were truthful with potential investors, new investors most certainly would have chosen not to invest. The defendants also admitted that this new investor money was used to pay the partners’ salary and bonus payments. In total, between 2003 and 2012, Geringer defrauded investors out of over $50 million. Between May 2009 and 2012, after Geringer confessed the fraud to Luck and Rode, investors were defrauded out of over $30 million.
Geringer, Luck and Rode were indicted by a federal grand jury on December 20, 2012. Each defendant was charged with conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. § 1349; mail fraud, in violation of 18 U.S.C. § 1341; wire fraud, in violation of 18 U.S.C. § 1343; securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. §§ 240.10b-5 and 240.10b5-2; and money laundering, in violation of 18 U.S.C. § 1957. All the charges were related to the defendants’ conduct at Geringer, Luck, and Rode, LLC.
On January 15, 2015, Luck was sentenced to 130 months’ imprisonment. The sentence was handed down by the Honorable Edward J. Davila, U.S. District Judge, following Luck’s guilty plea to one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and one count of wire fraud. Judge Davila also sentenced Luck to a three year period of supervised release, ordered the defendant to pay restitution in the amount of $32,880,811.82, and ordered him to forfeit $32,880,811.82 to the United States government. Luck began serving his prison term on April 9, 2015.
Geringer was sentenced to 145 months’ imprisonment on June 25, 2015. This sentence also was handed down by Judge Davila following Geringer’s plea of guilty to one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and one count of wire fraud. Judge Davila also sentenced Geringer to a three year period of supervised release, ordered the defendant to pay restitution in the amount of $50,327,484.04, and ordered him to forfeit $50,327,484.04 to the United States government. Geringer will begin serving his prison term on August 20, 2015.
Yesterday, Judge Davila sentenced Rode to 70 months’ imprisonment following Rode’s guilty plea to one count of mail fraud. Judge Davila also sentenced Rode to a three year period of supervised release, ordered the defendant to pay restitution in the amount of $32,880,811.82, and to forfeit $32,880,811.82 to the United States government. Rode will begin serving his prison term on September 3, 2015.
Assistant U.S. Attorney Jeff Schenk is prosecuting the case with the assistance of Nina Williams and Laurie Worthen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Owner of New Jersey Aircraft Parts Brokerage Company Indicted for Laundering Scrapped Jet Engine Parts, Filing False Tax ReturnsRead the Press Release
NEWARK, N.J. – A federal grand jury returned a 23-count indictment today against the owner of a Ridgefield, New Jersey, aircraft parts brokering company for his role in a 19-year conspiracy to launder scrapped jet engine parts and for avoiding taxes related to his aircraft parts business, U.S. Attorney Paul J. Fishman announced.
Gideon Vaisman, 75, of Edgewater, New Jersey, was charged with one count of conspiracy to commit mail and wire fraud, nine counts of mail fraud, four counts of wire fraud, one count of conspiracy to commit fraud involving aircraft parts and eight counts of filing false tax returns. Vaisman was previously arrested on May 13, 2013 and charged by complaint with one count of conspiracy to commit wire fraud.
According to the indictment:
Vaisman owned Integrated Technology Corp. from 1989 through 1998, and Tara Technology Corp. from 1998 onward. Both businesses were located in Ridgefield and bought and sold aircraft parts. From 1990 through 2009, Vaisman orchestrated a scheme to defraud Federal Aviation Administration (FAA) repair stations, aircraft parts brokers, aircraft parts end-users and others by using phony documents to resell jet engine parts obtained from scrap metal dealers.
Vaisman, on behalf of Integrated Technology, and later Tara Technology, directly and indirectly purchased vital jet engine parts called “blades” and “vanes” from scrap metal dealers. Afterwards, Vaisman instructed Tara Technology’s general manager, Carmine Coviello, 63, to use his Suffern, New York-based aircraft parts broker and seller company, Shelby Enterprises, to sand and file the parts in order to conceal that they had been scrapped and, on occasion, rejected for repair by an FAA repair station. FAA regulations mandate that only FAA-certified repair stations or certified airframe and power plant mechanics may perform such work on aircraft parts.
Vaisman, Coviello and others also conducted sham sales of the illegally altered blades and vanes to Integrated Technology and Tara Aviation Ltd., an aircraft parts broker and seller incorporated in Tortola, British Virgin Islands, and located in Guernsey, United Kingdom. Despite being listed under a different owner, Tara Aviation was in fact completely controlled and financed by Vaisman. The sole purpose of these sales, which occurred only on paper, was to generate fraudulent trace paperwork for the parts. Trace paperwork documents the history of an aircraft part and includes information such as the part’s manufacturer, the aircraft on which the part was used and how it was used. The paperwork is also employed in determining whether an aircraft or aircraft part has been subject to severe stress or heat as would occur during a major engine failure, accident or fire. Under Vaisman’s direction and without any knowledge of the history of the scrapped parts, Coviello prepared fraudulent trace paperwork certifying that the parts had not been subjected to excessive stress and heat or deemed unsuitable by an FAA repair station.
Vaisman, Coviello and another conspirator stored the blades and vanes in Tara Technology’s warehouse inventory, ultimately selling them to aircraft brokers, airlines and others on behalf of Tara Aviation using the fraudulent trace paperwork.
The indictment also alleges that although Tara Technology and Tara Aviation acted as a single entity and that Vaisman controlled all of Tara Aviation’s operations, provided financing and had complete authority over its inventory and cash flows, he failed to report $14,236,000 in net income from Tara Aviation on his personal tax returns and those of Tara Technology.
The mail and wire fraud conspiracy and substantive charges each carry a maximum term of 20 years in prison and $250,000 fine, or twice the loss caused by the offense. The conspiracy to commit fraud involving aircraft parts carries a maximum term of 15 years in prison and a $500,000 fine, or twice the gross gain or loss caused by the offense. The tax charges each carry a maximum term of three years in prison and a $250,000 fine or twice the loss caused by the offense.
Coviello previously pleaded guilty to an information charging him with conspiracy to commit wire fraud in relation to the scheme. His sentencing is scheduled for Sept.10, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s charges.
The case is being prosecuted by Deputy Chief Scott B. McBride of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark.
The charge and allegations against Vaisman are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Gerald Krovatin, Esq., Newark
Office Manager Sentenced to Federal Prison for Embezzling More Than $500,000 from Her EmployerRead the Press Release
ROME, Ga. - Judy Elaine Henry has been sentenced to serve three years and one month in federal prison for committing wire fraud in connection with a scheme to defraud Bec-Don, Inc., a company that supplies concrete reinforcing steel and related products to the construction industry.
“This defendant abused her employer’s trust by stealing money from the company account for nearly eight years,” said Acting U.S. Attorney John Horn. “Businesses have the right to expect honest services from their employees, but they should nonetheless be vigilant and adopt protocols to safeguard against internal fraud.”
“The sentencing of Ms. Henry in federal court holds her accountable for her eight years of theft from an employer who trusted her. The FBI, along with the Catoosa County Sheriff's Office, which assisted in the matter, fully understands how these types of thefts can adversely impact the bottom line of the victim company's financial stability,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to Acting U.S. Attorney Horn, the charges and other information presented in court: Henry was the manager of Bec-Don’s office in Ringgold, Georgia, and was authorized to sign checks on Bec-Don’s account. From approximately 2006 through 2014, Henry embezzled more than $500,000 in company funds by writing checks payable to herself from Bec-Don’s account, and by making false entries in Bec-Don’s checkbook and accounting records to make it appear that the checks had been issued to pay legitimate company expenses. Henry deposited some of the fraudulent checks into her personal account and then used her debit card to spend the stolen money.
Judy Elaine Henry, 50, of Lafayette, Georgia, was sentenced to three years, one month in prison, to be followed by five years of supervised release, and ordered to pay restitution in the amount of $565,005.05. Henry was convicted on these charges on April 23, 2015, after she pleaded guilty.
This case was investigated by the Federal Bureau of Investigation, and the Catoosa County Sheriff’s Department.
Assistant United States Attorney J. Russell Phillips prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Rome Division is http://www.justice.gov/usao-ndga.
North Hampton Man Pleads Guilty to Child Pornography PossessionRead the Press Release
CONCORD, NEW HAMPSHIRE: Jeffrey Leblanc, 28, of North Hampton, New Hampshire, pled guilty on Friday in United States District Court for the District of New Hampshire to possessing child pornography, announced Acting United States Attorney Donald Feith.
On August 26, 2014, a search warrant was executed at Leblanc’s residence in North Hampton, New Hampshire. A computer was seized, which was later found to contain approximately 30 videos of child pornography. During an on-scene interview, Leblanc admitted that he had downloaded child pornography to his personal computer.
Leblanc is scheduled for sentencing in October 2015, and faces a maximum prison term of 20 years, to be followed by no less than 5 years of supervised release, lifetime sex offender registration, and a fine of up to $250,000.
The case was investigated by the North Hampton Police Department, in conjunction with the Department of Homeland Security (Homeland Security Investigations), the New Hampshire Internet Crimes Against Children Task Force (NH ICAC), and the Salem Police Department. The case is being prosecuted by Assistant United States Attorney Nick Abramson.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, Project Safe Childhood combines federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Non-Indian Man Charged with Murdering an Indian Man in Ohkay Owingeh PuebloRead the Press Release
ALBUQUERQUE – Jack R. Patterson, Jr., 66, a non-Indian, who resides in the Pueblo of Ohkay Owingeh, N.M., appeared in federal court in Albuquerque, N.M., this morning on a criminal complaint charging him with murder and violating the federal firearms laws. Patterson, who was arrested on July 8, 2015, was ordered detained pending trial.
Antonio Valdez, 24, is charged in a separate criminal complaint with aiding and abetting murder and being an accessory after the face. Valdez, also a non-Indian who resides in the Pueblo of Ohkay Owingeh, has yet to be apprehended and is considered a fugitive.
Patterson is charged with murdering an Indian of the Ohkay Owingeh Pueblo and Northern Cheyenne Tribe who is an enrolled member of the Northern Cheyenne Tribe on the night of May 25, 2015, in Chamita, N.M., which is located in Ohkay Owingeh Pueblo. He also is charged with being a felon in possession of a firearm. Valdez is charged with being an accessory after the fact for allegedly assisting Patterson conceal his crime by helping Patterson bury the victim’s remains in a shallow grave outside Patterson’s residence in Chamita.
The charges against Patterson and Valdez were announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge William McClure of District IV of the Bureau of Indian Affairs (BIA) Office of Justice Services, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, Chief Pete N. Kassetas of the New Mexico State Police and Chief Donovan Trujillo of the Ohkay Owingeh Tribal Police Department.
According to court filings, the charges against Patterson and Valdez are the result of an investigation initiated by the BIA on May 27, 2015, after learning that the Ohkay Owingeh Tribal Police Department received a missing person’s report about the victim. By late June 2015, the investigative team, which grew to include the FBI and New Mexico State Police, had learned that the victim had last been seen in the company of Patterson and Valdez. Witnesses reported hearing gunshots coming from the direction of Patterson’s residence on the night of May 25, 2015. Witnesses also reported hearing that Valdez allegedly killed the victim and that Valdez allegedly claimed to know where the victim was buried.
On July 7, 2015, the investigators executed a federal search warrant at Patterson’s residence. During the search, human remains were found in a grave on Patterson’s property. The remains were identified as those of the victim by tattoos. A rifle, which was loaded with ammunition, was also seized during the search of Patterson’s property. Patterson was prohibited from possessing either firearms or ammunition because of his status as a convicted felon.
If convicted, Patterson faces a maximum penalty of life imprisonment on the murder charge and a maximum penalty of ten years in prison for being a felon in possession of a firearm. If convicted, Valdez faces a maximum penalty of life imprisonment on the murder charge and a maximum penalty of 15 years in prison on the accessory after the fact charge.
Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
A photograph of fugitive Antonio Valdez is attached to this press release. Anyone with information on the whereabouts of this fugitive is asked to contact the BIA at (505) 455-2295.
The charges against Patterson and Valdez are the result of investigation by the Northern Pueblos Agency of the BIA’s Office of Justice Services, the FBI, the Ohkay Owingeh Tribal Police Department, the FBI’s Evidence Response Team and the New Mexico State Police. Assistant U.S. Attorney Sarah Jane Mease is prosecuting the case.
valdez_photo.docx (42.55 KB)
Nogales Resident Sentenced to 78 Months for Fraudulent Tax Refund SchemeRead the Press Release
TUCSON, Ariz. – On July 8, 2015, Scott William Acorn, 43, of Nogales, Ariz., was sentenced by U.S. District Judge Cindy K. Jorgenson to a total of 78 months imprisonment and ordered to pay $415,000 in restitution. Acorn pleaded guilty on March 31, 2015, to conspiracy, filing false claim for refund, wire fraud, and aggravated identity theft.
Acorn and another individual together acquired the personal identification information (name, birthdate, and social security number) of approximately 1,117 individuals. Using this information, Acorn and his co-defendant electronically filed false tax returns for these individuals seeking refunds of approximately $1,000 on each return. The individuals whose information was used were unaware of the returns being filed in their name. For tax years 2010 and 2011, the conspirators sought over a million dollars in fraudulent refunds which resulted in a payout of $414,000 by the United States Treasury.
Acorn’s sentence was enhanced by his admission that he fled to Mexico while on pre-trial release in 2012 and continued to file false tax returns in much the same manner as before. In September of 2014, he was discovered and returned to the United States to face prosecution.
The investigation in this case was conducted by Internal Revenue Service, Criminal Investigation, Tucson. The prosecution was handled by the U.S Attorney’s Office for the District of Arizona, Tucson.
CASE NUMBER: CR-12-1293-CKJ-JR
RELEASE NUMBER: 2015-051_Acorn
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Miami-Dade County Resident Pled Guilty to Filing False Refund Claims with the IRSRead the Press Release
A Miami-Dade County resident pled guilty to filing false refund claims with the Internal Revenue Service.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Mavys Galvez, 32, of Miami, Florida, pled guilty to one count of making a false, fictitious, and fraudulent claim against the United States, in violation of Title 18, United States Code, Section 287.
According to court documents, Galvez filed false 2006, 2007, 2008 and 2009 amended federal income tax returns with the IRS claiming fraudulent refunds. In the returns, Galvez falsely asserted that she and her husband were owed millions of dollars in income from various entities, and that those entities had withheld the money as federal income tax paid to the IRS. In fact, the entities owed no such income to Galvez or her husband, and withheld no such taxes on their behalf. Specifically, Galvez filed a 2006 amended tax return with her husband claiming a tax refund of $1,049,270 based in large part on claimed income and $810,224 of tax withheld by a bank. The tax return also attached a Form 1099-OID purportedly from the bank reflecting those totals, as well as 1099-OID forms from other entities. The filed 1099-OID forms were false.
Court documents indicate that Galvez had previously filed legitimate tax returns for tax years 2006 through 2009, knew that she and her husband had not received the income from the various entities reported on the fraudulent returns, knew that the taxes claimed had not been withheld, and knew that the 1099-OID forms were false. The total amount of fraudulent refunds claimed by Galvez for tax years 2006 through 2009 is $3,424,834.
Mavys Galvez is scheduled to be sentenced on September 17, 2015 at 1:30 p.m. before United States District Judge William P. Dimitrouleas. At sentencing, the defendant faces a maximum of five years of imprisonment.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney John P. Gonsoulin.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Memphis Man Charged with Sex Trafficking of 2 Minors by using Threats, Violence, and Coercion to Compel Girls into Prostitution in New Orleans and ElsewhereRead the Press Release
U.S. Attorney Kenneth A. Polite announced that TIMOTHY JONES, a/k/a “Lucci,” “King Lucci,” “Lucci Loco,” age 25, of Memphis, was charged today in an eight-count Indictment for offenses related to his involvement in the sex trafficking of two minor into the New Orleans area for the purposes of those minors engaging in prostitution.
According to the Indictment, in early December 2013, JONES met and began recruiting Victim 1, a 17-year-old female from Baton Rouge, to work for him as a prostitute. For approximately three weeks, Victim 1 did so. In early January 2014, JONES met Victim 2, a sixteen-year-old female from Memphis and recruited her to work for him as a prostitute. JONES then arranged for Victim 2 to travel first to Louisville, Kentucky, and then to New Orleans, to work for him as a prostitute. JONES required Victim 1 and Victim 2 to give him all of the money they earned from engaging in prostitution. JONES advertised prostitution dates with Victim 1 and Victim 2 using an online classified website. JONES instructed Victim 1 and Victim 2 on how much to charge for sex, how to solicit “dates,” and how to avoid detection by law enforcement. He also instructed them to steal credit cards, wallets, cash, and other valuables from customers.
JONES also used a variety of means to control his victims. Among his techniques, JONES provided them with alcohol and illicit drugs to numb their senses, control their behavior, and encourage them to continue engaging in prostitution. To further coerce his victims, JONES beat them, punched them, and forced them to have sex with him. JONES also beat, punched, and choked others who worked for him as prostitutes in front of Victim 1 and Victim 2 as a means of threatening and intimidating them. When Victim 2 told JONES that she wanted to return to Memphis and stop working for him as a prostitute because she was ill and did not want him to beat her anymore, JONES told her that he would send her home once she earned enough “real” money.
If convicted, JONES faces a mandatory minimum term of imprisonment of fifteen years and a maximum of life, followed by up to a life term of supervised release, and a $250,000 fine. JONES may also be required to register as a sex offender.
“As alleged, Timothy Jones used violence, alcohol, and drugs to coerce underage women into prostitution,” stated U.S. Attorney Polite. “Today’s indictment continues our Office’s heightened efforts in combating human trafficking. Individuals and businesses that profit from these heinous crimes are now on notice.”
U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
U.S. Attorney Polite praised the work of the New Orleans Field Offices of the Federal Bureau of Investigation and Homeland Security Investigations, with assistance from the Louisiana State Police, in investigating this matter. Assistant U.S. Attorney Jordan Ginsberg is in charge of the prosecution.
Timothy Jones Indictment.pdf (3.46 MB)
Man Charged with Armed Robbery of Shop ‘N Save Pleads GuiltyRead the Press Release
Devante J. Hodges, 22, of Cahokia, IL, plead guilty in the United States District Court to a three-count indictment charging him with Conspiracy to Interfere with Commerce by Robbery, Interference with Commerce by Robbery, and Use of a Firearm During a Crime of Violence, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. The Armed Robbery counts arise from the federal Hobbs Act, which makes it a crime to obstruct, delay or affect interstate commerce by robbery, and is used by United States Attorney Wigginton as a way to combat armed robbery in the Southern District of Illinois. Hodges has been in custody since he was charged on February 6, 2015.
Documents filed in the U.S. District Court establish that on January 11, 2015, Hodges, Lemarcus Jackson, Undray Webb, and Byron Holton entered the Shop ‘n Save, located at 1028 Camp Jackson Road in Cahokia, Illinois, masked, gloved and armed with a black handgun, a chrome semi-automatic handgun, a large frame revolver, and a long rifle with a high capacity magazine. Hodges, Jackson, Webb, and Holton pointed the firearms at employees and customers within the store and threatened to kill a customer if they were not given money from the store safe. Holton jumped the service counter and demanded the employees place money from the safe into a black book bag while Hodges, Jackson, and Webb stood guard at the door with their firearms. Hodges, Jackson, Webb and Holton then left the store and fled the area in a vehicle being driven by the getaway driver, Durand Harper.
Hodges was arrested and interviewed by law enforcement. During the interview, Hodges admitted to being one of the four gunmen who robbed the Shop ‘n Save and identified Byron Holton, Undray Webb and Lemarcus Jackson as the other three gunmen and Durand Harper as the getaway driver. Hodges stated he was the masked man with the large frame revolver. Hodges admitted that he receive approximately $1,000 in proceeds from the robbery.
Hodges faces a prison term of up to 20 years, a fine of up to $250,000, and a term of supervised release of up to 3 years on the Hobbs Act violations. On the count of Use of a Firearm During a Crime of Violence, Hodges faces a term of imprisonment of not less than 7 years up to a maximum term of Life, consecutive to, meaning in addition to, any term of imprisonment imposed on the Hobbs Act violations. Sentencing is scheduled for October 27, 2015, in East St. Louis, Illinois.
As to Lemarcus Jackson, Undray Webb, Byron Holton, and Durand Harper, their cases are still pending, thus they are presumed innocent of the charges unless or until proven guilty beyond a reasonable doubt.
The case was investigated by the Cahokia Police Department, the Sauget Police Department and the Federal Bureau of Investigation. The case is assigned to Assistant United States Attorney Ali Summers for prosecution.
Local Insurance Salesman Sentenced on Fraud and Tax ChargesRead the Press Release
St. Louis, MO – PAUL PARKER was sentenced to 36 months in prison involving a scheme to defraud four clients by using their investment funds to pay his expenses and gamble. He also failed to file tax returns during the scheme, in part to avoid reporting his income from the fraud.
According to court documents, Parker held an account in the name of American Investors, Inc. for the purported purpose of receiving funds from clients to purchase life insurance annuities. Rather than purchase annuities on his clients’ behalf, however, Parker spent their money on personal expenses and gambling. In the course of the scheme, Parker also used monies contributed by later clients to fund repayments to prior clients. In total, Parker took in approximately $259,168 through false and fraudulent pretenses, resulting in a loss to investors of approximately $209,168. Parker also admitted to failing to file federal income tax returns for three years from 2010 to 2012.
Parker, St. Louis, Missouri, pled guilty in April to one felony count of mail fraud and three counts of failure to file a tax return. He appeared today for sentencing before United States District Judge Rodney W. Sippel. Parker was also ordered to pay $72,805 to the IRS and the Missouri Department of Revenue for the taxes he failed to pay.
This was investigated by Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Richard Finneran handled the case for the U.S. Attorney’s Office.
Lafayette man sentenced to 20 years in prison for child pornography distributionRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Lafayette man was sentenced to 240 months in prison for distributing child pornography to a 16-year-old.
Thomas Dessoye, 54, of Lafayette, was sentenced by U.S. District Judge Elizabeth E. Foote on one count of distribution of child pornography. He was also sentenced to serve 10 years of supervised release and ordered to pay $5,095 in restitution. According to evidence presented at the March 11, 2015 guilty plea, Dessoye began communicating via the internet with a 16-year-old who lived in Minnesota. On October 20, 2012, Dessoye sent the 16-year-old a link to Dessoye’s Dropbox account. Dropbox is an internet site that allows account holders to store images and videos as well as other digital files. The Dropbox account holder can send others a link so they can view material the account holder has stored on the Dropbox account. When Dessoye shared his Dropbox account with the 16-year-old, Dessoye had uploaded videos of child pornography to the Dropbox account. These videos depicted children engaging in sex acts with other children as well as videos depicting adults engaging in sexual acts with children.
According to an affidavit filed in support of the criminal complaint, after distributing child pornography to the 16-year-old, Dessoye traveled from Louisiana to Minnesota without the knowledge or consent of the minor’s parents. He picked up the 16-year-old and transported him back to Louisiana. Shortly after that, the parents of the 16-year-old reported their child missing. The Sherburne County Sheriff’s Office in Minnesota working with the Lafayette Parish Sheriff’s Office used information provided by a cell phone provider to locate the missing child at Dessoye’s residence in Lafayette. The child was then returned to the parents.
“Combating abuse of children is a top priority of this office,” Finley stated. “My office, along with our law enforcement partners, will use every tool available to prosecute these cases to the fullest extent of the law and put child predators behind bars. Our goal is to keep children safe.”
The FBI, Lafayette Parish Sheriff’s Office, and the Sherburne County Sheriff’s Office of Elk River, Minn., investigated the case. Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Those concerned may also leave tips with the FBI at tips.fbi.gov. Tips may be submitted anonymously. The Lafayette FBI office number is (337) 232-2164.
Justice Department Sues Nevada Housing Provider for Discriminating Against Families with ChildrenRead the Press Release
The Justice Department today filed a lawsuit against the owners of rental properties in Carson City, Nevada, alleging violations of the Fair Housing Act. The lawsuit, filed in the U.S. District Court for the District of Nevada, charges that Betty Brinson and Hughston Brinson, the owners of a single-family rental home, discriminated against families with children by placing a series of advertisements in the local newspaper indicating a preference for adult tenants, and by refusing to rent the home to a family with three children because they did not want children living at the property. The suit also alleges that Ms. Brinson placed discriminatory advertisements for another property she owns – a 36-unit apartment complex – indicating a preference for adult tenants.
The lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD) by the family who alleged they were refused the opportunity to rent the single-family home because they were a family with children. After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.
The lawsuit seeks an order prohibiting the defendants from engaging in future unlawful discrimination. It also seeks the payment of a civil penalty and monetary damages for individuals who were refused the opportunity to rent because their children would be living with them.
“The Fair Housing Act includes important protections for families with children,” said Vanita Gupta, the head of the Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act to ensure that families with children do not face discrimination in the housing market and have equal access to housing opportunities.”
“For more than 25 years, the Fair Housing Act has made it illegal for families to be denied housing based on policies that discriminate against children,” said Gustavo Velasquez, Assistant Secretary for HUD’s Fair Housing and Equal Opportunity Office. “HUD will continue to work with the Justice Department to vigorously enforce fair housing laws that protect the right of families with children to live where they choose.”
Fighting illegal housing discrimination is a top priority of the Justice Department. The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Visit www.usdoj.gov/crt for more information about the Civil Rights Division and the laws it enforces. Additional information about the Fair Housing Act is available at www.HUD.gov.
Justice Department Announces University of Montana Police Department Has Fully Implemented Agreement to Improve Response to Reports of Sexual AssaultsRead the Press Release
MISSOULA – The Department of Justice announced today that the University of Montana Police Department (UMPD) has fully implemented the requirements of its agreement with the department to improve the UMPD’s response to reports of sexual assault. The agreement, which was entered into in May 2013, resolved part of the department’s comprehensive investigation of the response by the Missoula, Montana, criminal justice system and the University of Montana to sexual assault. Thomas R. Tremblay, the independent reviewer who assesses whether the terms of the agreement have been met, has determined – and the department has agreed – that the UMPD has met all of its obligations under the agreement and achieved the overall purpose of the agreement.
The purpose of the agreement between the department and the UMPD was to better protect and vindicate the rights of sexual assault victims by transforming the UMPD’s response to reports of sexual assault. To do this, the agreement required significant changes to the UMPD’s policies, practices and supervision. These changes promote more reliable sexual assault investigations, and effective, nondiscriminatory law enforcement and community support for victims, the police department and its officers. The UMPD’s implementation of the agreement has resulted in a host of historic advances in the Missoula response to sexual assault, including the following:
- development and institution of model policies and protocols for the UMPD’s response to reports of sexual assault, and for its communication and cooperation with its university and local law enforcement partners;
- extensive specialized training for first responders and detectives in the response to sexual assault;
- cooperation with the development and institution of an External Review Panel – one of the first of its kind – to review closed sexual assault cases for investigative comprehensiveness and indications of gender bias;
- completion of an audit of the community-wide response to sexual assault – one of the first community audits to focus exclusively on sexual assault – including all of the key law enforcement agencies, advocacy organizations and medical service providers serving victims of sexual assault in Missoula County; and
- community advocates and students reporting better communication and coordination with UMPD officers than ever before.
“Our agreement with the University of Montana Police Department following our investigation into the handling of sexual assault complaints made by women in Missoula has been a catalyst for powerful changes in the law enforcement, the university, and the community’s coordinated response to sexual assault,” said Vanita Gupta, the head of the Civil Rights Division. “We are grateful for the efforts of the University of Montana, the UMPD and the entire Missoula community because, as a result of these reforms, the women of Missoula are safer, more trusting of the criminal justice system and subject to more fair and respectful treatment by campus police. The University of Montana and the UMPD had the courage and leadership to acknowledge and address these problems on its campus, and as a result, they are poised to become a model for institutions of higher education and campus police departments grappling with these issues around the country.”
“Today signals a true accomplishment by the University of Montana and its police department,” said U.S. Attorney Michael Cotter of the District of Montana. “They have worked tirelessly toward changes that are substantial, sustainable, and will benefit the community for generations to come. Thanks to this community effort, today the university is safer and is a place where students can learn and thrive.”
The full implementation of the department’s agreement with the UMPD marks the second completion of the four agreements stemming from the department’s multi-pronged investigation, launched in May 2012, regarding the handling of sexual assault complaints made by women in Missoula. The investigation, conducted under the Violent Crime and Law Enforcement act of 1994, the Safe Streets Act, Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972, evaluated the response to sexual assault at the University of Montana at Missoula, the UMPD, the Missoula Police Department (MPD) and the Missoula County Attorney’s Office. The department entered into agreements with the university, the UMPD and the MPD in May 2013, to resolve findings related to those parties and address deficiencies in their response to sexual assaults. The department, together with the Montana Attorney General’s Office, entered into an agreement with the Missoula County Attorney’s Office the following year, in June 2014. The implementation of those agreements has already improved these parties’ response to sexual assaults.
These agreements, as well as a description of the Department of Justice’s work regarding sexual assault in Missoula are available at: http://www.justice.gov/crt/about/spl/. The independent reviewer’s final compliance report, describing in detail his determination that the UMPD has successfully achieved full compliance with the Justice Department agreement, is forthcoming, and will be available on the Justice Department’s website upon its release.
Justice Department Announces University of Montana Police Department Has Fully Implemented Agreement to Improve Response to Reports of Sexual AssaultRead the Press Release
The Department of Justice announced today that the University of Montana Police Department (UMPD) has fully implemented the requirements of its agreement with the department to improve the UMPD’s response to reports of sexual assault. The agreement, which was entered into in May 2013, resolved part of the department’s comprehensive investigation of the response by the Missoula, Montana, criminal justice system and the University of Montana to sexual assault. Thomas R. Tremblay, the independent reviewer who assesses whether the terms of the agreement have been met, has determined – and the department has agreed – that the UMPD has met all of its obligations under the agreement and achieved the overall purpose of the agreement.
The purpose of the agreement between the department and the UMPD was to better protect and vindicate the rights of sexual assault victims by transforming the UMPD’s response to reports of sexual assault. To do this, the agreement required significant changes to the UMPD’s policies, practices and supervision. These changes promote more reliable sexual assault investigations, and effective, nondiscriminatory law enforcement and community support for victims, the police department and its officers. The UMPD’s implementation of the agreement has resulted in a host of historic advances in the Missoula response to sexual assault, including the following:
-
development and institution of model policies and protocols for the UMPD’s response to reports of sexual assault, and for its communication and cooperation with its university and local law enforcement partners;
-
extensive specialized training for first responders and detectives in the response to sexual assault;
-
cooperation with the development and institution of an External Review Panel – one of the first of its kind – to review closed sexual assault cases for investigative comprehensiveness and indications of gender bias;
-
completion of an audit of the community-wide response to sexual assault – one of the first community audits to focus exclusively on sexual assault – including all of the key law enforcement agencies, advocacy organizations and medical service providers serving victims of sexual assault in Missoula County; and
-
community advocates and students reporting better communication and coordination with UMPD officers than ever before.
“Our agreement with the University of Montana Police Department following our investigation into the handling of sexual assault complaints made by women in Missoula has been a catalyst for powerful changes in the law enforcement, the university, and the community’s coordinated response to sexual assault,” said Vanita Gupta, the head of the Civil Rights Division. “We are grateful for the efforts of the University of Montana, the UMPD and the entire Missoula community because, as a result of these reforms, the women of Missoula are safer, more trusting of the criminal justice system and subject to more fair and respectful treatment by campus police. The University of Montana and the UMPD had the courage and leadership to acknowledge and address these problems on its campus, and as a result, they are poised to become a model for institutions of higher education and campus police departments grappling with these issues around the country.”
“Today signals a true accomplishment by the University of Montana and its police department,” said U.S. Attorney Michael Cotter of the District of Montana. “They have worked tirelessly toward changes that are substantial, sustainable, and will benefit the community for generations to come. Thanks to this community effort, today the university is safer and is a place where students can learn and thrive.”
The full implementation of the department’s agreement with the UMPD marks the second completion of the four agreements stemming from the department’s multi-pronged investigation, launched in May 2012, regarding the handling of sexual assault complaints made by women in Missoula. The investigation, conducted under the Violent Crime and Law Enforcement act of 1994, the Safe Streets Act, Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972, evaluated the response to sexual assault at the University of Montana at Missoula, the UMPD, the Missoula Police Department (MPD) and the Missoula County Attorney’s Office. The department entered into agreements with the university, the UMPD and the MPD in May 2013, to resolve findings related to those parties and address deficiencies in their response to sexual assaults. The department, together with the Montana Attorney General’s Office, entered into an agreement with the Missoula County Attorney’s Office the following year, in June 2014. The implementation of those agreements has already improved these parties’ response to sexual assaults.
These agreements, as well as a description of the Department of Justice’s work regarding sexual assault in Missoula are available at: http://www.justice.gov/crt/about/spl/. The independent reviewer’s final compliance report, describing in detail his determination that the UMPD has successfully achieved full compliance with the Justice Department agreement, is forthcoming, and will be available on the Justice Department’s website upon its release.
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Jury Finds California Man Guilty of Attempted Methamphetamine Trafficking on KauaiRead the Press Release
HONOLULU – A federal jury found Roman Gabriel Contreras, 44, of Ontario, California, guilty on Monday, July 6, after a three day trial in United States District Court in Honolulu. Contreras was found guilty of attempted possession with intent to distribute of more than 500 grams of a substance containing methamphetamine on Kauai on March 24, 2015.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that evidence presented at trial showed that Contreras, utilizing a false name, flew to Lihue airport from Los Angeles International airport on March 24, 2015 with three plastic containers hidden in baggage checked under the fictitious name. Evidence also established that the three containers which held almost three pounds of pure methamphetamine, were discovered after Drug Enforcement Administration (DEA) agents executed a search warrant on March 25th on Contreras’ bags. Evidence also showed that Contreras attempted to avoid a DEA agent and Kauai Police Department Officers after he deplaned the California flight at Lihue airport.
Contreras, who has a prior state felony drug conviction for promoting methamphetamine, faces up to life in prison, with a mandatory minimum 20-year term of imprisonment when he is sentenced by District Judge Derrick K. Watson on October 21, 2015.
The investigation which resulted in the charge in the case was conducted by DEA and the Kauai Police Department. The prosecution was handled by Assistant U.S. Attorney Thomas Muehleck.
Jackson County Man Pleads Guilty to EscapeRead the Press Release
On July 9, 2015, Kenneth D. Harris, Jr., 47, of Elkville, IL, pled guilty to a one-count indictment charging escape, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence at the plea hearing established that Harris is serving a 63 month sentence for conspiracy to manufacture methamphetamine. In December 2014, the Bureau of Prisons transferred Harris’ custody from Greenville-FCI to Centerstone Residential Reentry Center in Marion. On March 25, 2015, Harris failed to return to Centerstone after being on work-release. Harris did not return to Centerstone and was located and arrested by the United States Marshals Service in Elkville on April 1, 2015.
The offense carries a penalty of up to an additional 5 years of time in federal prison, to be followed by 3 years’ supervised release, and a fine of up to $250,000. Harris is currently being held without bond pending a November 3, 2015, sentencing hearing.
The investigation was conducted by the United States Marshals Service. The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Happy's Pizza Founder and Co-Conspirators Sentenced to Prison for Multi-Million Dollar Income and Employment Tax Fraud SchemeRead the Press Release
A Detroit-area businessman and other co-conspirators were sentenced to prison this week for income and employment tax fraud in the U.S. District Court for the Eastern District of Michigan, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
“Fraudulent business owners who underreport their income and employment taxes cheat not only the IRS and U.S. taxpayers, but also other businesses that comply with their tax obligations and seek to compete on a level playing field,” said Acting Assistant Attorney General Ciraolo. “Today’s sentencing of Happy Asker and the sentences imposed on his co-conspirators demonstrate that there is a heavy price for this conduct, and for obstructing and misleading IRS agents in the course of their investigation.”
Happy Asker, 38, of West Bloomfield, Michigan, was sentenced today to serve 50 months in prison, three years of supervised release and ordered to pay $2.5 million in restitution to the Internal Revenue Service (IRS) and a special assessment of $3,300 by U.S. District Court Chief Judge Denise Paige Hood. According to court documents and statements made during a 10-day jury trial in November 2014, Happy Asker was the president, founder and public face of the Happy’s Pizza franchise, a pizza chain based in Farmington Hills, Michigan, that operated restaurants throughout Michigan, Ohio and Illinois. Asker was convicted of three counts of filing false income tax returns for the years 2006 through 2008, 28 counts of aiding and assisting in the filing of false income and payroll tax returns for several of Happy’s Pizza franchise restaurants for the years 2006 through 2009, and corruptly endeavoring to obstruct and impede the administration of the Internal Revenue Code.
Asker’s co-conspirators and other individuals involved in the tax scheme, Maher Bashi, 47, Tom Yaldo, 42, and Tagrid Bashi, 47, all of West Bloomfield; and Arkan Summa, 42, of Walled Lake, Michigan, all pleaded guilty for their roles prior to Asker’s trial. On Oct. 23, 2014, Maher Bashi and Yaldo pleaded guilty to conspiracy to defraud the United States. On July 15, 2014, Summa pleaded guilty to obstruction of the IRS and Tagrid Bashi pleaded guilty to willfully delivering false documents to the IRS.
Maher Bashi, who served as Happy's Pizza's corporate chief operating officer, and Yaldo, an owner of numerous Happy's Pizza franchises, were also sentenced this week. On July 7, Bashi was sentenced to serve two years in prison, three years of supervised release and ordered to pay $620,297 in restitution to the IRS. Yaldo was sentenced to serve 18 months in prison, three years of supervised release and ordered to pay $314,078 in restitution to the IRS.
On April 1, Summa, an owner of numerous Happy’s Pizza franchises, was sentenced to serve 18 months in prison and ordered to pay $199,847 in restitution to the IRS. Tagrid Bashi, a nominee Happy’s Pizza franchise owner, was sentenced to three years of supervised probation.
“The license to run a business is not a license to avoid paying taxes,” said Chief Richard Weber of IRS-Criminal Investigation. “Mr. Asker and his co-defendants chose greed over legal business practices. As business owners, they had a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service, as well as file timely individual and corporate tax returns. Time and again, our special agents untangle the web of financial transactions to bring to justice those that would try to cheat the government and the American taxpayer.”
Evidence at trial established that from 2004 through 2011, Asker, along with certain franchise owners and employees, executed a systematic and pervasive tax fraud scheme to defraud the IRS. Gross sales and payroll amounts were substantially underreported on numerous corporate income tax returns and payroll tax returns filed for nearly all 60 Happy’s Pizza franchise locations. From 2008 to 2010, Asker and his co-conspirators diverted for personal use more than $6.1 million in cash gross receipts from approximately 35 different Happy’s Pizza stores in the Detroit area, Illinois and Ohio. In total, Asker and certain employees and franchise owners failed to report approximately $3.84 million of gross income and approximately $2.39 million in payroll taxes from the various Happy’s Pizza franchises to the IRS. A portion of the unreported income was shared among most of the franchise owners, including Asker, in a weekly cash “profit split.” As a result of the scheme, the IRS is owed more than $6.2 million in income and employment taxes. The evidence also established that Asker intentionally misled IRS-Criminal Investigation special agents during voluntary interviews conducted with him in 2010.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, the Drug Enforcement Administration and the FBI, who investigated the case, and Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Tax Division, who prosecuted the case. Ciraolo also thanked the U.S. Attorney’s Office of the Eastern District of Michigan for their substantial assistance.
Gastonia Woman Pleads Guilty to Embezzling More Than $500,000 from EmployerRead the Press Release
CHARLOTTE, N.C. – A Gaston County woman appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to stealing more than $500,000 from her employer, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Jennifer Ann Champagne, 39, of Gastonia, N.C. pleaded guilty making and possessing forged and counterfeit securities, wire fraud and access device fraud.
Acting U.S. Attorney Rose is joined in making today’s announcement by Felica R. Rude, Acting Special Agent in Charge of the U.S. Secret Service in Charlotte.
According to charging documents and today’s court proceedings, from 2006 to 2013, Champagne was employed by a Charlotte-based company specializing in the construction and repair of tennis courts and running tracks. Champagne was the company’s office manager and bookkeeper, and had access to the company’s safe, computer accounting programs, online bank accounts, security passwords and other confidential information. According to court records, Champagne did not have access to and was not authorized to sign company checks, or use the company’s bank accounts or credit card accounts outside of the normal course of business.
Court records show that Champagne exploited her position as office manager and embezzled money from her employer by signing the company’s President’s name on forged checks and then altered the company’s books and records to hide the theft. For example, according to court records, Champagne embezzled more than $260,000 by forging 100 company checks in her name and her husband’s landscaping business. Champagne also used the company’s credit card to make more than 400 unauthorized charges totaling over $40,000. Court records indicate that Champagne also made authorized bank transfers from the company’s bank accounts to her bank accounts, and issued a company credit in her name, which she used to make 170 unauthorized charges. Overall, court records show that Champagne’s scheme caused the company a loss of over $540,000.
Champagne was released on bond after her plea hearing. The making and possessing forged and counterfeit securities charge carries a maximum prison term of 10 years and a $250,000 fine. The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine. The access device fraud charge carries a maximum prison term of 15 years and a $250 fine. As part of her plea agreement, Champagne has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendant has not been set yet.
The investigation was handled by the U.S. Secret Service. The prosecution for the government is being handled by Assistant U.S. Attorney Kenneth Smith of the U.S. Attorney’s Office in Charlotte.
Fourteen Plead Guilty in Mail Theft ConspiracyRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Wendy B. Sisk, age 44, Crystal D. Hudson, age 33, both of Honea Path, Jason Tomsha, age 46, of Greenville, Shannon D. Ashworth, age 33, Tonya M. Reid, age 38, John T. Eskew, age 28, Casey Hembree, age 20, Justin D. Powers, age 24, Whitney Strickland, age 27, Danny C. Buford, age 47, Ashley N. Burdette, age 29, James M. Day, age 44, Andrew C. Keaton, age 23, and Bonnie Reid, age 57, all of Anderson, pled guilty yesterday in federal court in Anderson, to conspiracy to steal United States mail, a violation of Title 18, United States Code, Section 371. United States District Timothy M. Cain, of Anderson accepted the pleas and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that the United States Postal Inspection Service, the Anderson County Sheriff’s Office, the Anderson City Police Department, and other local agencies had undertaken a long-term investigation into the theft of mail in and around Anderson County. It was discovered that an organization existed that regularly stole mail from residential boxes, sorted the stolen mail for checks and personal identifying information, created altered or counterfeit checks, and created false identification documents. Multiple counterfeit and altered checks were passed throughout the upstate. Law enforcement estimates that the losses from the activities of the conspiracy exceed $160,000. Most of the fraud was conducted in an effort to obtain funds to purchase methamphetamine. Since the arrest of the Defendants in April 2015, Postal Inspectors report that complaints of mail theft in Anderson County have markedly dropped.
Mr. Nettles stated the maximum penalty the Defendants can receive is a fine of $250,000 and/or imprisonment for 5 years, plus a special assessment of $100.
The case was investigated by agents of United States Postal Inspection Service, the Anderson County Sheriff’s Office, the Anderson City Police Department, and other local law enforcement agencies. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
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Founders of Film School for Wounded Veterans Found Guilty of Conspiracy, Fraud, and EmbezzlementRead the Press Release
SAN DIEGO – A federal jury returned guilty verdicts this afternoon against Judith Paixao and Kevin Lombard, a husband and wife who embezzled federal funds that were intended to provide job training, benefits and equipment for injured Marines returning from Iraq and Afghanistan.
Instead, the jury found, the couple used some of the funds to pay for a variety of personal expenses, including a vacation in Bermuda, cell phone bills for their family members, and the costs of a New Year’s Day sailing trip around San Diego Bay.
“Any fraud against our federal agencies is a serious matter,” said U.S. Attorney Laura Duffy. “But the fraud committed by these defendants -who used money set aside to help wounded veterans and spent it on themselves - is particularly offensive. These defendants capitalized on the misfortune of wounded marines in their time of vulnerability and took advantage of the VA’s commitment to serving wounded veterans to defraud the VA and enrich themselves.”
“Today, the jury’s guilty verdicts of Kevin Lombard and Judith Paixao send a clear message that fraud against our veterans will not be tolerated. These veterans endured many sacrifices to protect our country from harm. IRS-Criminal Investigation is committed to working with our partners to protect America’s veterans from tax evaders and fraudsters.”
From 2007-2009, Paixao and Lombard were directors of the Wounded Marine Careers Foundation (“the Foundation”), a tax-exempt entity that trained injured veterans for careers in the film industry. Evidence presented at trial showed that the defendants conspired to defraud the Department of Veterans Affairs (“VA”) and submitted false claims to the VA to get funds for training and equipment they never provided. In addition, the defendants were convicted on several felony counts related to embezzling funds from the Foundation. Finally, Defendant Paixao was convicted on one count of mail fraud for her role in a scheme to defraud another charity out of scholarship funds.
Evidence presented at trial showed that the defendants made numerous false and misleading statements to the VA in order to obtain funds for training and equipment, and then did not provide the training or equipment to the veterans. Although the defendants claimed to have donated over $200,000 to start the Foundation, they ended up taking over $400,000 from the Foundation’s accounts over the course of two years.
Rather than paying the Foundation’s creditors (some of whom were board members), the defendants transferred funds to their own personal credit cards and bank accounts. Although some of this money went to repay expenses they had fronted to the Foundation, the defendants ended up taking over $100,000 for themselves. The defendants then used these funds to pay for a variety of personal expenses, including a vacation in Bermuda, cell phone bills for their family members, and the costs of a New Year’s Day sailing trip around San Diego Bay.
The defendants routinely commingled the finances of the Foundation with their personal finances, thereby obstructing the ability of the Internal Revenue Service to monitor the Foundation’s tax-exempt status and determine the defendants’ personal income tax liability.
Among the witnesses who testified at trial were three of the injured veterans who used their vocational rehabilitation benefits to participate in the first training class: Gunnery Sergeant Nick Popaditch and Lance Corporal Joshua Frey. Lance Corporal Frey, who had previously been quoted in a favorable New York Times article, testified at trial that after the article was published the defendants did not give him all the equipment he was promised, and failed to provide him with certain training and job placement.
Evidence at trial also showed that Defendant Paixao defrauded the Bob Woodruff Foundation in connection with a restricted grant of almost $100,000 by concealing the fact that one of the intended recipients – a Marine who had been injured in Fallujah – had left the program. Instead of notifying the Bob Woodruff Foundation and asking for a reallocation of the funds, Ms. Paixao took the grant money and used it for other purposes.
Both defendants remain on bond and were ordered to return to court on October 19, 2015 for a sentencing hearing.
DEFENDANTS Case Number: 13cr3788-JM Judith Ann Paixao Age: 61 Brunswick, Georgia Kevin Lombard Age: 64 Brunswick, Georgia CHARGESCount 1: Conspiracy to defraud the United States and commit the offenses (18 U.S.C. § 371).
Guilty as to both defendantsCounts 2-9: Theft from an organization receiving federal funds (18 U.S.C. § 666(a)(1)).
Defendant Paixao: Guilty as to all counts
Defendant Lombard: Guilty on counts 2-4, 6-10; not guilty on count 5.Counts 10-12: False claims (18 U.S.C. § 287)
Guilty as to all counts for both defendantsCount 13: Mail fraud (18 U.S.C. § 1341)
INVESTIGATING AGENCIES
Defendant Paixao: Guilty
Defendant Lombard: Not GuiltyDepartment of Veterans Affairs, Office of Inspector General
Internal Revenue Service, Criminal InvestigationFormer Rochester Tax Preparer Pleads Guilty to Preparing False ReturnsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Jason R. Pastore, 34, formerly of Rochester, NY, pleaded guilty to preparing false tax returns, before U.S. District Judge Elizabeth A. Wolford. The charge carries a maximum penalty of three years in prison and a $250,000 fine.Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated the defendant operated a tax return business known as JRP Tax Consultants in Rochester. Pastore, without the knowledge of clients, prepared fraudulent federal income tax returns. Specifically, the defendant reported false charitable contributions and un-reimbursed employee expenses on Schedule A, and false business deductions on Schedule C. As a result, clients received tax refunds to which they were not entitled.
For the tax years, 2008, 2009, and 2010, Pastore prepared approximately 234 fraudulent returns which resulted in the Internal Revenue Service paying more than $400,000 in tax refunds to which the clients were not entitled. The defendant also prepared and filed fraudulent tax returns for himself during the same time period.
The plea is the result of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office.
Sentencing is scheduled for November 9, 2015, at 10:30 a.m. before Judge Wolford.Former Property Manager Pleads Guilty to Stealing over $380,000 from Employer and ClientsRead the Press Release
WASHINGTON – Lorraine Cyr, 58, pled guilty today to charges stemming from the embezzlement of over $380,000 from her employer and properties that she managed, announced Acting U.S. Attorney Vincent H. Cohen, Jr., Thomas Jankowski, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Cyr, of Palm Bay, Fla., pled guilty in the U.S. District Court for the District of Columbia to one count of wire fraud and one count of income tax evasion. The Honorable Senior Judge Royce C. Lamberth scheduled sentencing for Oct. 19, 2015. The wire fraud charge carries a statutory maximum of 20 years in prison and the charge of income tax evasion carries up to five years; both also carry potential financial penalties. Under federal sentencing guidelines, Cyr faces a likely range of 41 to 51 months of incarceration and a fine between $7,500 and $75,000. The plea agreement calls for Cyr to pay over $380,000 in restitution to a property management company and various other victims of her scheme, as well as $96,112 to the IRS. She also is subject to a forfeiture money judgment in the amount of $342,917.
According to a statement of offense submitted at the plea hearing, Cyr worked from 2001 until 2009 for a property management company, referred to in court documents as “Property Management Company A,” in Washington, D.C. She was vice president of operations during her last four years of employment, handling duties such as management of payroll, bank accounts, budgeting, invoicing, and tax preparation for the company and its clients. The clients consisted largely of cooperative and condominium apartment buildings in the District of Columbia.
In 2009, Cyr started her own property management company, Lorraine Cyr Management Group, Inc., also in Washington, D.C., in which she performed similar duties for various clients, including some who transitioned to her new firm. In her new role, she had virtually unfettered discretion to manage the business affairs of her clients, who granted her access to bank accounts to manage their operations and expenses.
Between July and November of 2009, prior to resigning from “Property Management Company A,” Cyr embezzled $37,620, which she used for personal purposes, including spending at casinos and various retailers. Then, between March 2010 and April 2011, while at her own firm, she stole $342,917 in funds from eight clients. She used the money for expenses such as spending at casinos, hotels, amusement parks, clothing stores, restaurants, and other retailers.
The tax charge stems from Cyr’s evasion of income taxes on the money that she was stealing during the course of her scheme.
In announcing the plea, Acting U.S. Attorney Cohen, Special Agent in Charge Jankowski and Chief Lanier commended the work of those who investigated the case from IRS-CI and MPD. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Thomas Swanton and Anthony Saler, who handled forfeiture issues; former Assistant U.S. Attorney Mary Chris Dobbie; Paralegal Specialists Heather Sales and Tasha Harris, Legal Assistant Angela Lawrence, and former Paralegal Specialist Nicole Wattelet. Finally, they expressed appreciation for the work of Trial Attorney Jeffrey McLellan, of the Department of Justice’s Tax Division, who assisted on the tax matter, and Assistant U.S. Attorney David A. Last, who investigated and prosecuted the case.
Former Patriots Player and Former Bank Executive Indicted on Fraud ChargesRead the Press Release
BOSTON – A former New England Patriots player and a former bank executive were indicted yesterday in connection with an investment scheme involving fraudulent loans to professional athletes.
Will Allen, 36, of Davie, Fla., and Susan Daub, 55, of Coral Springs, Fla., were indicted on twelve counts of wire fraud, one count of conspiracy to commit wire fraud, six counts of identity theft and several counts of money laundering (four counts for Allen and one count for Daub). Both were arrested and charged in a criminal complaint in June 2015. Allen played in the National Football League from 2001 to 2012. In 2012, he signed a one-year contract with the New England Patriots.
The indictment alleges that Allen and Daub ran their company, Capital Financial Partners (CFP) as a Ponzi scheme, using money raised from new investors to pay back investments made by earlier investors. Allen and Daub allegedly defrauded investors out of millions of dollars by claiming that the funds would be used to back high-interest, short-term loans to professional athletes through CFP, Allen and Daub’s Massachusetts-based company. While CFP did make some loans to athletes, the indictment alleges that Allen and Daub also diverted millions of investor dollars to themselves and other business ventures.
Allen and Daub allegedly told some investors that the loans CFP made to professional athletes were larger than they actually were, allowing Allen and Daub to collect more money from investors than they were lending out to athletes. In other instances, Allen and Daub are accused of collecting money from investors to fund fictitious loans. To keep investors from discovering their fraud, Allen and Daub allegedly used newly invested money to make payments to existing investors, which they falsely characterized as interest and principal payments from athlete borrowers.
The charges of wire fraud and conspiracy to commit wire fraud provides for sentences of no greater than 20 years in prison and up to three years of supervised release. The charge of identity theft provides for a sentence of two years in prison and up to one year of supervised release. The charge of money laundering provides for a sentence of no greater than 10 years in prison and up to three years of supervised release. Allen and Daub also may be fined of up to $250,000 or twice the gross gain or loss caused by offense, whichever is greater, on each of the counts. Actual sentences for federal crimes are typically less than maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. This case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit. The U.S. Attorney’s Office received valuable assistance from the Securities and Exchange Commission, which previously charged Allen and Daub in a civil complaint.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Five defendants sentenced for roles in Lafayette district attorney’s office bribery caseRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that five defendants were sentenced for their roles in a pay-for-plea scheme that garnered favorable treatment for defendants charged with various state crimes.
Barna D. Haynes, 61; Greg Williams, 46; and Sandra Degeyter, 63, all of Lafayette were sentenced by U.S. District Judge Elizabeth E. Foote on one count of conspiracy to commit bribery. Denease Curry, 49, of Broussard, and Elaine Crump, 61 of Lafayette, were also sentenced by Foote on one count of misprision of a felony for failure to report bribes offered and received by employees of the 15th Judicial District Attorney’s Office. Hanyes, Williams and Curry were former employees District Attorney’s Office. Degeyter and Crump were former employees of Acadiana Outreach. For sentencing details see the graphic below:
Defendants Prison Term Supervised Release Probation Fine Community Service Home Confinement Table containing sentencing information for Barna Hanyes and other defendants Haynes 18 months 1 year $5,000 Williams 2 years 6 months Degeyter 2 years 6 months Curry 2 years 200 hours Crump 2 years 200 hoursAccording to the guilty pleas, the defendants conspired with Lafayette private investigator Robert Williamson, 64, who is not licensed to practice law, to move cases through the legal system. From March 2008 to February 2012, Williamson solicited thousands of dollars from individuals with pending criminal charges in the 15th Judicial District and promised them favorable resolutions to pending felony and misdemeanor cases, the majority of which were OWI cases. The favorable resolutions were obtained by improperly manipulating the procedures set forth in Louisiana Criminal Code of Louisiana Procedure Article 894.
Article 894 provides a process by which a person can initially plead guilty to a crime with the understanding that the conviction will be set aside if the person successfully completes certain requirements imposed during a probationary period. The District Attorney’s Office had previously established a process by which select defendants could receive what was referred to as “immediate 894 pleas” on OWI cases. In order to qualify for the immediate 894 plea, the charged individuals were required to provide certifications at the time of the plea stating that they had completed all legal prerequisites, including community service, a substance abuse program and a driver safety program. If the District Attorney authorized the immediate 894 plea, the case was not placed on any docket, and the defendant was allowed to plead at a time and place different than the normal OWI docket. Following the entry of the immediate 894 plea, the judge would grant the 894 motion, dismissing the conviction, which served as an acquittal, thereby enabling those OWI defendants to immediately reinstate their driving privileges with no record.
Defendant Williamson charged individuals as much as $5,000 to participate in the Article 894 process. He also paid bribes in cash and other things of value to employees of the 15th Judicial District Attorney=s Office, who included Haynes, who at the time worked as the administrative assistant to the district attorney; Williams, who was an assistant district attorney; and Curry, who was Williams’ secretary and assisted Haynes with the Williamson cases. Williamson also paid bribes in cash and other things of value to employees of other organizations associated with the OWI program, including Acadiana Outreach, where Crump and Degeyter were formerly employed. Williamson obtained false and fraudulent certifications from Acadiana Outreach, which certified that his clients completed court-ordered community service when in fact the individuals had not.
Beginning in 2008, Haynes began transferring Williamson’s “clients” from city court to district court. Specifically, if one of Williamson’s clients was scheduled to appear in city court, Haynes transferred the case to district court and scheduled the case to be resolved during one of the “immediate 894 sessions.” Haynes also prepared the expungement paperwork associated with Williamson’s clients and was paid $500 for each case. During the course of the conspiracy, Haynes received at least $55,000 from Williamson.
Williams, Assistant District Attorney for the 15th Judicial District, handled immediate 894 pleas and received bribes for his role in the scheme. Beginning in 2010, he was aware of Haynes and Williamson’s arrangement to place cases into district court to be heard as part of the 894 sessions and that Williamson was not an attorney. Williamson gave Williams payments to include $500 cash, an autographed New Orleans Saints hat, bicycles for Williams and his family members, and clothing for Williams.
Sometime beginning in 2010, Curry became aware that Haynes and Williamson were using the immediate 894 pleas for favorable disposition of certain cases, mostly OWIs. Curry began helping to coordinate the immediate 894 sessions and would contact the judge’s chambers to set up the sessions. Curry also prepared Williams’ files for the sessions. After Haynes took an extended medical leave in 2010, Williamson paid Curry $200 for each case for a total of $1,600.
Beginning in 2008, Degeyter, agreed to provide false and fraudulent Acadiana Outreach community service certificates to Williamson in exchange for money. The fraudulent certificates falsely confirmed that Williamson’s clients completed court-ordered community service. Williamson paid Degeyter $100 per certificate. Degeyter admitted producing more than 50 false certificates between the spring of 2008 and October 2009. She received between $5,000 and $10,000 in bribes.
Crump, who was also employed as a case manager at Acadiana Outreach, was asked by Degeyter to assist with continuing the scheme. The two agreed that Degeyter would continue to create fraudulent Acadiana Outreach community service certificates, and in exchange for cash payments, Crump would permit Degeyter to sign Crump’s name on the fraudulent certificates. Degeyter began providing cash payments to Crump, from $25 to $100, which was a portion of what Degeyter received from Williamson. Shortly after Crump was laid off from Acadiana Outreach in September 2011, Degeyter and Crump agreed that Degeyter would continue creating additional certificates and sign Crump’s name on them backdating the documents to dates within Crump’s employment at Acadiana Outreach. She received between $1,000 and $2,000 in bribes.
“These public servants and employees decided that money mattered more than justice, safety and their duty to serve the public,” said Finley. “I hope these convictions send a message that the facilitation of schemes like this are not worth it. I want to thank all of the prosecutors, agents and law enforcement who worked diligently on this case. Their hard work is to be commended for assisting in putting an end to this OWI scheme.”
Williamson pleaded guilty June 8, 2015, and faces a maximum penalty of five years in prison for one count of conspiracy to commit bribery, 10 years in prison for one count of bribery, and five years in prison for one count of Social Security fraud. He also faces a $250,000 fine or both with up to three years of supervised release for each count. Sentencing date is September 25, 2015.
The FBI and the Social Security Administration – Office of Inspector General conducted the investigation. Assistant U.S. Attorneys John Luke Walker and Robert C. Abendroth are prosecuting the case.
Fargo Man Sentenced for Possession and Distribution of Child PornographyRead the Press Release
FARGO – Acting U.S. Attorney Christopher C. Myers announced that on July 9, 2015, Devon Cole Reed, 27, Fargo, North Dakota, was sentenced before U. S. District Judge Ralph R. Erickson to serve 16 years in prison followed by a lifetime of supervised release on two counts of Receiving and Distributing Child Pornography, and three counts of Possession of Child Pornography. Judge Erickson also sentenced Reed to pay $3000 in restitution.
This case came to the attention of law enforcement after the electronic service provider Google notified the National Center for Missing and Exploited Children (NCMEC) that a specific Gmail account contained child pornography. Law enforcement traced the account to Devin Reed, who was residing in Fargo, North Dakota. A search of Reed’s email accounts revealed that he was using them for the purpose of trading child pornography with other users located throughout the country. Law enforcement also recovered various media from Reed’s residence that also contained child pornography.
"HSI has taken a very aggressive stance against those who trade in child pornography in our communities," said acting Special Agent in Charge William Lowder of HSI in St. Paul. "Anyone who would violate the most innocent among us should know that law enforcement at all levels are standing shoulder to shoulder to hunt these predators down to protect those who cannot protect themselves."
The case was investigated by the Department of Homeland Security - Homeland Security Investigations, the North Dakota Bureau of Criminal Investigation, and the Fargo Police Department.
Assistant U. S. Attorney Jennifer Puhl and Assistant U. S. Attorney Keith Reisenauer prosecuted the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood, in conjunction with the Internet Crimes Against Children (ICAC) Task Force help federal, state, and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communications systems, and/or computer technology to sexually exploit children. The ICAC program is a national network of 61 coordinated task forces engaging in proactive investigations, forensic investigations, and criminal prosecutions. Project Safe Childhood also helps to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
East St. Louis Man Sentenced for Heroin OffenseRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced that Frederick D. Purnell, Sr. was sentenced on Tuesday, July 7, 2015, to 27 months in federal prison for Possession of Heroin (With Intent to Distribute).
Purnell, 38 of East St. Louis, IL, pled guilty to the federal charge on April 14, 2015. According to evidence introduced at Purnell’s change of plea hearing, Deputy U.S. Marshals arrested Purnell in Cahokia on April 4, 2013 and seized just over 5 grams of heroin (1/5 ounce) from a nightstand in his bedroom. Purnell told arresting officers that he had been selling heroin around Cahokia, and that he had intended to sell the heroin which police seized.
The investigation which resulted in Purnell’s arrest and conviction was conducted by the U.S. Marshals Service.
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
East St. Louis Man Sentenced for Failing to Register as A Sex OffenderRead the Press Release
Willie Watson, 38, of East St. Louis, IL, was sentenced this morning in the United States District Court for the Southern District of Illinois to 18 months in federal prison, followed by 5 years of supervised release, on one count of Failure to Register as a Sex Offender, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence showed that Watson was convicted of Criminal Attempt to Commit Rape of a Child in Tennessee in 1999. Due to that conviction, Watson was required to register as a sex offender. Watson last registered as a sex offender on October 15, 2012, in the state of Tennessee, but then moved to East St. Louis, Illinois, and failed to register as a sex offender once in Illinois. On November 15, 2014, he arrested by the Fairview Heights Police Department.
The case was investigated by the U.S. Marshals Service and the Fairview Heights Police Department. The case was prosecuted by Assistant United States Attorney Laura Reppert.
District Man Found Guilty of Aggravated Assault for Striking Metropolitan Police Department Officer with His CarRead the Press Release
WASHINGTON – Kevin Burno, 26, of Washington, D.C., has been found guilty by a jury of aggravated assault while armed, assault on a police officer while armed, and assault with a dangerous weapon stemming from his use of a 1991 Lexus sedan to run over a Metropolitan Police Department patrol officer, Sean Hickman, in March 2013 in Southeast Washington, announced Acting U.S. Attorney Vincent H. Cohen, Jr. and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
The verdict was returned on July 9, 2015, following a trial in the Superior Court of the District of Columbia. The Honorable Patricia A. Broderick scheduled sentencing for Sept. 15, 2015. Burno faces up to 30 years of incarceration.
“This case is a reminder that police officers put themselves in harm’s way every day to serve our community,” said Acting U.S. Attorney Cohen. “This officer was seriously injured while on the job when a criminal intentionally ran him down with a car for no reason at all. A D.C. jury has now held Kevin Burno accountable for this brazen assault. We are pleased that justice has been served.”
“Officer Sean Hickman is not only a wonderful police officer, he is one of the nicest people I have ever had the pleasure of meeting,” said Chief Lanier. “Prior to becoming a police officer Sean worked as a second-grade teacher, which is a true testament of his dedication to public service and speaks further to the generous and kind person that he is. The assault that Officer Hickman suffered is truly tragic, an unfortunate reality that police officers face, and one that has left him permanently injured. I am pleased by the jury’s decision.”
According to the government’s evidence, on March 5, 2013, at about 6:30 p.m., Officer Hickman was patrolling in Southeast Washington on his 250cc Honda Rebel motor scooter. Officer Hickman was responding to a call in the area when he observed Burno’s vehicle pulling out of a parking spot and heading southbound without its lights on. The officer was travelling northbound and pulled his motor scooter over to the northbound parking lane, where he made a hand signal to Burno’s vehicle indicating that his headlights were not on. Burno pulled out of his parking spot and drove in Officer Hickman’s direction. Burno then abruptly turned his vehicle into the officer, causing him to be thrown off his motor scooter and onto the sidewalk – unable to move. Burno sped off without stopping or providing medical assistance to Officer Hickman.
Officer Hickman was treated for serious injuries to the left side of his body in general, and his lower left leg in particular. To date, he has limited movement in his left leg and can no longer work patrol duties.
In announcing the verdict, Acting U.S. Attorney Cohen and Chief Lanier commended the work of Officer Hickman and the Metropolitan Police Department’s Sixth District. They also acknowledged the efforts of those who worked on the prosecution from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Brandon Long and Richard DiZinno, who investigated and indicted the case; Litigation Technology Specialist Leif Hickling; Paralegal Specialists Stephanie Gilbert and Richard Cheatham; and Intern Willie Wilson. Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Derrick Williams and Karen Seifert, of the Felony Major Crimes Trial Section, who prosecuted the matter.
District Court Enters Permanent Injunction against Nevada Animal Drug Manufacturer to Prevent Distribution of Adulterated DrugRead the Press Release
The U.S. District Court for the District of Nevada entered a consent decree of permanent injunction against Bio Health Solutions LLC, of Reno, Nevada, and Mark Garrison, its manager, to prevent the distribution of RenAvast, an animal drug that is adulterated, the Department of Justice announced today.
“The department will not hesitate to bring enforcement actions against animal drug producers who do not follow the necessary procedures to comply with our nation’s animal drug laws,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division.
On July 9, the department filed a complaint in U.S. District Court at the request of the U.S. Food and Drug Administration (FDA) alleging that Bio Health Solutions and Garrison caused the shipment of RenAvast in interstate commerce in violation of federal law. The complaint alleged that Bio Health Solutions markets, sells and distributes RenAvast, which the company describes as an animal supplement, and that the company intended that RenAvast be used to treat and prevent kidney disease and chronic renal failure in cats and dogs.
Under the federal Food, Drug and Cosmetic Act (FDCA), a new animal drug includes any drug intended for use for animals, the composition of which is such that it is not generally recognized as safe and effective for use under the conditions prescribed, recommended or suggested in its labeling. A new animal drug that lacks FDA approval or otherwise fails to meet an exception under the law is deemed to be unsafe, and a new animal drug that is unsafe under the law is deemed to be adulterated. The complaint alleged that defendants caused the shipment of RenAvast, an adulterated animal drug, into interstate commerce.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from introducing or delivering for introduction into interstate commerce, manufacturing, processing, packaging, labeling, holding, selling or distributing RenAvast. In addition, these same restrictions apply to any other product intended to diagnose, cure, mitigate, treat or prevent disease, unless and until a new animal drug application has been approved, or the product meets the requirements for an investigational new animal drug exemption in the law.
According to the complaint, the FDA issued a warning letter to Garrison on Aug. 1, 2012. The letter cited numerous statements throughout the defendants’ website and other promotional materials that showed the intended use of RenAvast was to prevent and/or treat kidney disease and chronic renal failure in cats. The FDA’s letter warned Garrison that RenAvast could not be legally marketed because it was a new animal drug that was not approved by the FDA.
The complaint further alleged that in November 2012, a representative for the company informed the FDA that the company had complied with FDA requests to remove statements on its website and in other promotional materials that showed its intent that RenAvast be used to mitigate, treat and prevent chronic renal failure in cats and in dogs. Nevertheless, the complaint alleged that after these assurances, Bio Health Solutions created a password-protected section on its website that contained numerous express disease claims. In addition, as alleged in the complaint, the FDA conducted undercover purchases of RenAvast, and such purchases confirmed that the defendants continued to make claims about RenAvast that caused it to be an adulterated drug under the FDCA.
The government is represented by Trial Attorney David A. Frank of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Steven J. Tave of the Department of Health and Human Services’ Office of General Counsel-Food and Drug Division and Assistant U.S. Attorney Greg Addington of the District of Nevada.
District Court Enters Permanent Injunction Against Nevada Animal Drug Manufacturer to Prevent Distribution of Adulterated DrugRead the Press Release
WASHINGTON – The U.S. District Court for the District of Nevada entered a consent decree of permanent injunction against Bio Health Solutions LLC, of Reno, Nevada, and Mark Garrison, its manager, to prevent the distribution of RenAvast, an animal drug that is adulterated, the Department of Justice announced today.
“The department will not hesitate to bring enforcement actions against animal drug producers who do not follow the necessary procedures to comply with our nation’s animal drug laws,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division.
On July 9, the department filed a complaint in U.S. District Court at the request of the U.S. Food and Drug Administration (FDA) alleging that Bio Health Solutions and Garrison caused the shipment of RenAvast in interstate commerce in violation of federal law. The complaint alleged that Bio Health Solutions markets, sells and distributes RenAvast, which the company describes as an animal supplement, and that the company intended that RenAvast be used to treat and prevent kidney disease and chronic renal failure in cats and dogs.
Under the federal Food, Drug and Cosmetic Act (FDCA), a new animal drug includes any drug intended for use for animals, the composition of which is such that it is not generally recognized as safe and effective for use under the conditions prescribed, recommended or suggested in its labeling. A new animal drug that lacks FDA approval or otherwise fails to meet an exception under the law is deemed to be unsafe, and a new animal drug that is unsafe under the law is deemed to be adulterated. The complaint alleged that defendants caused the shipment of RenAvast, an adulterated animal drug, into interstate commerce.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from introducing or delivering for introduction into interstate commerce, manufacturing, processing, packaging, labeling, holding, selling or distributing RenAvast. In addition, these same restrictions apply to any other product intended to diagnose, cure, mitigate, treat or prevent disease, unless and until a new animal drug application has been approved, or the product meets the requirements for an investigational new animal drug exemption in the law.
According to the complaint, the FDA issued a warning letter to Garrison on Aug. 1, 2012. The letter cited numerous statements throughout the defendants’ website and other promotional materials that showed the intended use of RenAvast was to prevent and/or treat kidney disease and chronic renal failure in cats. The FDA’s letter warned Garrison that RenAvast could not be legally marketed because it was a new animal drug that was not approved by the FDA.
The complaint further alleged that in November 2012, a representative for the company informed the FDA that the company had complied with FDA requests to remove statements on its website and in other promotional materials that showed its intent that RenAvast be used to mitigate, treat and prevent chronic renal failure in cats and in dogs. Nevertheless, the complaint alleged that after these assurances, Bio Health Solutions created a password-protected section on its website that contained numerous express disease claims. In addition, as alleged in the complaint, the FDA conducted undercover purchases of RenAvast, and such purchases confirmed that the defendants continued to make claims about RenAvast that caused it to be an adulterated drug under the FDCA.
The government is represented by Trial Attorney David A. Frank of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Steven J. Tave of the Department of Health and Human Services’ Office of General Counsel-Food and Drug Division and Assistant U.S. Attorney Greg Addington of the District of Nevada.
Detroit Area Doctor Sentenced to 45 Years in Prison for Providing Medically Unnecessary Chemotherapy to PatientsRead the Press Release
A Detroit area hematologist-oncologist was sentenced today to serve 45 years in prison for his role in a health care fraud scheme that included administering medically unnecessary infusions or injections to 553 individual patients and submitting to Medicare and private insurance companies approximately $34 million in fraudulent claims.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.
Farid Fata, M.D., 50, of Oakland Township, Michigan, pleaded guilty in September 2014 to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering. U.S. District Judge Paul D. Borman of the Eastern District of Michigan imposed the sentence and ordered Fata to forfeit $17.6 million.
“Rather than use his medical degree to save lives, Dr. Fata instead destroyed them in pursuit of profit,” said Assistant Attorney General Caldwell. “Time and again, Dr. Fata callously violated his patients' trust as he used false cancer diagnoses and unwarranted and dangerous treatments as tools to steal millions of dollars from Medicare, even stooping to profit from the last days of some patients' lives. While no sentence can restore what was taken from his patients and their families, the sentence imposed ensures that never again will Dr. Fata lay hands on another patient.”
“Health care fraud has been a serious problem in Michigan, but no case has been as egregious as the conduct of Dr. Farid Fata,” said U.S. Attorney McQuade. “Dr. Fata did not care for patients; he exploited them as commodities. He over-treated, under-treated and outright lied to patients about whether they had cancer so that he could maximize his own profits.”
“Fata’s heinous acts did far worse than defraud government health care programs and breach his professional oath,” said Special Agent in Charge Abbate. “Fata caused grievous emotional and physical harm, betraying the trust of hundreds of innocent patients by selfishly placing his personal financial gain over the health and welfare of those who entrusted him with their medical care. The many brave individuals impacted by this defendant’s criminal acts had the strength to come forward, express their experiences of pain and suffering, and collaborate with law enforcement and prosecutors to ensure that Fata’s despicable actions were brought to an end and justice delivered.”
“It is startling and abhorrent when greed is so potent that it drives a medical professional to recklessly abandon the most basic and important principle of his profession, ‘First, Do No Harm,” said Special Agent in Charge Pugh. “Dr. Fata did just that when he falsely diagnosed his patients with cancer and administered toxic chemotherapy with potentially harmful and even deadly side effects. Today’s sentencing is a clear message that, working closely with our law enforcement partners, we will continue to investigate, charge and prosecute medical professionals who jeopardize the health of patients.”
“This is the most egregious case of fraud and deception that I have seen in my career," said Chief Weber. “Dr. Fata not only defrauded the government out of millions of dollars, but he lied to his patients about their health and intentionally put their lives at risk. In fact, because of his lies, some of those patients who he was entrusted to care for likely died as a result of his actions. This defendant greedily cared more about his own financial well-being than the lives of his patients. This disgusting and diabolical scheme has hurt hundreds of patients and their families and stolen from them something that no punishment from the court can do to make them whole.”
As set forth at sentencing, Fata was a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology P.C. (MHO), which had locations in Rochester Hills, Michigan; Clarkston, Michigan; Bloomfield Hills, Michigan; Lapeer, Michigan; Sterling Heights, Michigan; Troy, Michigan; and Oak Park, Michigan. He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan.
In connection with his guilty plea, Fata admitted to prescribing and administering unnecessary aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients in order to increase his billings to Medicare and other insurance companies. Fata then submitted fraudulent claims to Medicare and other insurers for these unnecessary treatments.
Fata also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in exchange for his referral of patients to those facilities.
Fata further admitted to using the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive positron emission tomography (PET) scans for which he billed a private insurer.
This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan. This case is being prosecuted by Assistant Chief Catherine K. Dick, Deputy Chief Gejaa T. Gobena, and Trial Attorney Matthew C. Thuesen of the Fraud Section, and by Assistant U.S. Attorney Sarah Resnick Cohen, White Collar Crime Unit Chief John K. Neal, and Health Care Fraud Unit Chief Wayne F. Pratt of the U.S. Attorney’s Office of the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team, go to: www.stopmedicarefraud.gov.
Detroit Area Doctor Sentenced to 45 Years in Prison for Providing Medically Unnecessary Chemotherapy to PatientsRead the Press Release
A Detroit area hematologist-oncologist was sentenced today to serve 45 years in prison for his role in a health care fraud scheme that included administering medically unnecessary infusions or injections to 553 individual patients and submitting to Medicare and private insurance companies approximately $34 million in fraudulent claims.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.
Farid Fata, M.D., 50, of Oakland Township, Michigan, pleaded guilty in September 2014 to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering. U.S. District Judge Paul D. Borman of the Eastern District of Michigan imposed the sentence, and ordered Fata to forfeit $17.6 million.
“Rather than use his medical degree to save lives, Dr. Fata instead destroyed them in pursuit of profit,” said Assistant Attorney General Caldwell. “Time and again, Dr. Fata callously violated his patients' trust as he used false cancer diagnoses and unwarranted and dangerous treatments as tools to steal millions of dollars from Medicare, even stooping to profit from the last days of some patients' lives. While no sentence can restore what was taken from his patients and their families, the sentence imposed ensures that never again will Dr. Fata lay hands on another patient.”
“Health care fraud has been a serious problem in Michigan, but no case has been as egregious as the conduct of Dr. Farid Fata,” said U.S. Attorney McQuade. “Dr. Fata did not care for patients; he exploited them as commodities. He over-treated, under-treated and outright lied to patients about whether they had cancer so that he could maximize his own profits.”
“Fata’s heinous acts did far worse than defraud government health care programs and breach his professional oath,” said Special Agent in Charge Abbate. “Fata caused grievous emotional and physical harm, betraying the trust of hundreds of innocent patients by selfishly placing his personal financial gain over the health and welfare of those who entrusted him with their medical care. The many brave individuals impacted by this defendant’s criminal acts had the strength to come forward, express their experiences of pain and suffering, and collaborate with law enforcement and prosecutors to ensure that Fata’s despicable actions were brought to an end and justice delivered.”
“It is startling and abhorrent when greed is so potent that it drives a medical professional to recklessly abandon the most basic and important principle of his profession, ‘First, Do No Harm,” said Special Agent in Charge Pugh. “Dr. Fata did just that when he falsely diagnosed his patients with cancer and administered toxic chemotherapy with potentially harmful and even deadly side effects. Today’s sentencing is a clear message that, working closely with our law enforcement partners, we will continue to investigate, charge and prosecute medical professionals who jeopardize the health of patients.”
“This is the most egregious case of fraud and deception that I have seen in my career," said Chief Weber. “Dr. Fata not only defrauded the government out of millions of dollars, but he lied to his patients about their health and intentionally put their lives at risk. In fact, because of his lies, some of those patients who he was entrusted to care for likely died as a result of his actions. This defendant greedily cared more about his own financial well-being than the lives of his patients. This disgusting and diabolical scheme has hurt hundreds of patients and their families and stolen from them something that no punishment from the court can do to make them whole.”
As set forth at sentencing, Fata was a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology P.C. (MHO), which had locations in Rochester Hills, Michigan; Clarkston, Michigan; Bloomfield Hills, Michigan; Lapeer, Michigan; Sterling Heights, Michigan; Troy, Michigan; and Oak Park, Michigan. He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan.
In connection with his guilty plea, Fata admitted to prescribing and administering unnecessary aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients in order to increase his billings to Medicare and other insurance companies. Fata then submitted fraudulent claims to Medicare and other insurers for these unnecessary treatments.
Fata also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in exchange for his referral of patients to those facilities.
Fata further admitted to using the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive positron emission tomography (PET) scans for which he billed a private insurer.
This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan. This case is being prosecuted by Assistant Chief Catherine K. Dick, Deputy Chief Gejaa T. Gobena, and Trial Attorney Matthew C. Thuesen of the Fraud Section, and by Assistant U.S. Attorney Sarah Resnick Cohen, White Collar Crime Unit Chief John K. Neal, and Health Care Fraud Unit Chief Wayne F. Pratt of the U.S. Attorney’s Office of the Eastern District of Michigan. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Team, go to: www.stopmedicarefraud.gov.
Captain of Genovese Crime Family Sentenced in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DANIEL PAGANO, a Captain of the Genovese Organized Crime Family of La Cosa Nostra (the “Genovese Crime Family”) was sentenced to a term of 27 months in prison for his leadership role in the Genovese Crime Family. PAGANO pled guilty to participating in a racketeering conspiracy in March 2015 and was sentenced today before by U.S. District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara said: “Danny Pagano, a Captain in the Genovese Crime Family, has been sentenced today for his leadership role in a racketeering conspiracy. Pagano’s conviction and sentence reinforce a simple truth: if you join the mob and choose a life of crime, you end up behind bars.”
According to the Indictment and other documents filed in this case, and statements made during the plea and sentencing proceedings:
The Genovese Crime Family is part of a nationwide criminal organization known by various names, including the “Mafia” and “La Cosa Nostra” (“LCN”), which operates through entities known as “Families.” The Genovese Crime Family operates through groups of individuals known as “crews” and “regimes,” most of which are based in New York City. Each “crew” has as its leader a person known as a “Caporegime,” “Capo,” “Captain,” or “Skipper,” who is responsible for supervising the criminal activities of his crew and providing “Soldiers” and associates with support and protection. In return, the Capo typically receives a share of the illegal earnings of each of his crew’s Soldiers and associates, which is sometimes referred to as Atribute.@ DANIEL PAGANO is a Caporegime or Captain in the Genovese Crime Family.
Each crew consists of “made” members, sometimes known as “Soldiers,” “wiseguys,” “friends of ours,” and “good fellows.” Soldiers are aided in their criminal endeavors by other trusted individuals, known as “associates,” who sometimes are referred to as “connected” or identified as “with” a Soldier or other member of the Family. Associates participate in the various activities of the crew and its members. In order for an associate to become a made member of the Family, the associate must first be of Italian descent and typically needed to demonstrate the ability to generate income for the Family and/or the willingness to commit acts of violence.
From 2009 through August 2014, PAGANO, along with other members and associates of the Genovese Crime Family, committed a wide array of crimes including operating an illegal gambling business. PAGANO, a Captain, exercised a leadership role within the Family by, among other things, settling disputes between and among associates of the Family.
As the Court noted, PAGANO had previously been convicted of racketeering conspiracy and served a term of over eight years in prison. As a repeat offender, a sentence of incarceration was warranted to deter him from future crimes.
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In addition to the prison term, Judge Abrams sentenced PAGANO, 61, of Rockland County, to a term of three years of supervised release, and ordered him to pay a fine of $5,000 and forfeiture of $2,000.
Mr. Bharara thanked the Federal Bureau of Investigation, the Rockland County District Attorney’s Office, the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the New York City Police Department, and the New York State Police.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jennifer Burns, Rahul Mukhi, and Abigail Kurland are in charge of the prosecution.
Buffalo Man Sentenced for Structuring Financial TransactionsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Abdo Nagi Fadel, 66, of Buffalo, NY, who was convicted of structuring currency transactions to evade reporting requirements, was sentenced to eight months in prison by U.S. District Court Judge Richard J. Arcara.Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that in 2009, the defendant, an employee of a family owned retail business with check cashing operations, was suspected of structuring currency transactions in order to evade reporting requirements mandated by the United States Secretary of the Treasury. In November and December 2009, law enforcement officials from United States Customs and Immigration Enforcement organized and executed an undercover operation in which Fadel agreed to cash a $28,000 check and structure cash payments back to an undercover agent who claimed that he was attempting to avoid paying child support. In exchange, the defendant received a $2,100 commission.
The sentencing is the culmination of an investigation on the part of Special Agents with Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy.
Buffalo Man Indicted for Drug-Related MurderRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a three count indictment charging Taire Chaney, 23, of Buffalo, NY, with narcotics conspiracy, discharge of firearm in furtherance of drug trafficking, and discharge of firearm causing death in furtherance of drug trafficking. The charges carry a minimum penalty of 10 years in prison, a maximum of life, and a $1,500,000 fine.Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that according to the indictment, Chaney participated in a drug trafficking conspiracy involving cocaine and crack cocaine. On February 29, 2012, in furtherance of that conspiracy, the defendant participated in the shooting murder of Brad Daniels.
“This represents the third cold case murder charged this week,” said U.S. Attorney Hochul.
The indictment is the result of an investigation into drug trafficking at the Perry Housing Projects in Buffalo. Chaney is the 13th defendant to be charged in the case. A total of six defendants have been convicted.The defendant will be arraigned before U.S. Magistrate Judge Hugh B. Scott on July 28, 2015, at 10:00 a.m.
Today’s indictment is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda. The Safe Streets Task Force partner agencies include the Amherst Police Department; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Cheektowaga Police Department; Erie County Sheriff’s Office; Hamburg Police Department; Lancaster Police Department; Niagara Frontier Transportation Authority; New York State Department of Correctional Services; New York State Police; U.S. Border Patrol; and U.S. Immigration and Customs Enforcement–Homeland Security Investigations.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Buffalo Man Arrested, Charged with Bank RobberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Isaiah J. Brown, 27, of Buffalo, NY, was arrested and charged by criminal complaint with bank robbery. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that according to the complaint, on July 9, 2015, Brown entered the First Niagara Bank at 2853 Delaware Avenue in Kenmore, NY. The defendant approached the teller and asked to exchange a one dollar bill. After receiving four quarters, Brown handed the teller a note that stated “This is a robbery Give me all your $20, $50, $100 I do have a gun!!” The teller provided the defendant with a specific amount of money.
Brown, who was described as wearing a curly light brown wig, black zip up hoodie, and sunglasses, left the bank and go into a Liberty Cab. A witness at the scene called law enforcement who contacted Liberty Cab. The cab company located the vehicle through global positioning satellite (GPS) and assisted in leading officers to the location of the cab.
A vehicle stop was conducted and the defendant was detained. According to the complaint, officers located a wig, money band and U.S. currency inside the vehicle.
Brown made an initial appearance this afternoon before U.S. Magistrate Judge Hugh B. Scott and being held pending a detention hearing on July 16, 2015.
The criminal complaint is the result of an investigation by the Kenmore Police Department, under the direction of Chief Peter Breitnauer and the Federal Bureau of Investigation.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Bucks County Woman Charged with Social Security FraudRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Criminal Information was filed on July 8, 2015 in U.S. District Court in Scranton charging a Newtown woman with allegedly defrauding the Social Security Administration of financial benefits intended for low-income individuals and families.
According to United States Attorney Peter Smith, in 2002 Dorothy Madison, age 51, of Newtown, Bucks County, was married but failed to report the marriage to the Social Security Administration’s Office in East Stroudsburg, Pennsylvania. Madison’s husband was gainfully employed, and by failing to report the resulting spousal income to the Social Security Administration, Madison obtained $58,901.96 in benefits to which she was not entitled over the ten year period following the marriage.
The government also filed a plea agreement which is subject to the approval of the court.
The case is the result of an investigation by the Social Security Administration. Prosecution is assigned to Assistant United States Attorney Peter Hobart.
Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under federal law for fraudulent acts in relation to Supplemental Security Income is five (5) years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Army National Guard Official Sentenced to 42 Months in Prison for Accepting $30,000 BribeRead the Press Release
An Army National Guard official was sentenced today to 42 months in prison for accepting a $30,000 bribe in exchange for steering a $3.6 million contract to a retired sergeant major of the Minnesota Army National Guard and his consulting company.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Acting Special Agent in Charge Paul Sternal of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.
Jason Rappoccio, 39, of Hampton, South Carolina, pleaded guilty on Feb. 3, 2015, to one count of conspiracy to commit bribery and one count of bribery. U.S. District Judge Liam O’Grady of the Eastern District of Virginia imposed the sentence and ordered Rappoccio to forfeit $31,328.
Rappoccio was an active duty sergeant first class in the Army National Guard. In connection with his guilty plea, Rappoccio admitted to accepting a $30,000 bribe from Timothy Bebus, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC (Mil-Team). In exchange, Rappoccio agreed to steer a $3.6 million contract to Mil-Team by awarding the contract to a Small Business Administration (SBA) 8(a) certified company, chosen by Bebus, that Rappoccio understood would sub-contract a portion of the work to Mil-Team.
Rappoccio admitted that the $30,000 bribe was structured to conceal the payment. Specifically, Bebus gave $6,000 in cash directly to Rappoccio, and the remaining $24,000 was paid in a cashier’s check in the name of Rappoccio’s wife.
Rappoccio also admitted to accepting additional benefits in exchange for steering an additional $4 million contract to Mil-Team. In particular, Rappoccio solicited and received from Bebus airline tickets for two of Rappoccio’s family members. He also received NFL tickets worth over $1,300 from another co-conspirator.
In connection with this investigation into corruption within the National Guard Bureau, eight others, including Bebus, have been convicted of offenses related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts. The investigation is ongoing.
The case was investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit. The case was prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.
Another Indicted for Role in Identity Theft and Tax Fraud SchemeRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced another indictment in connection with a continuing effort to combat stolen identity refund fraud and other tax fraud schemes by the United States Attorney’s Office for the Middle District of Louisiana and the Baton Rouge Office of the Internal Revenue Service, Criminal Investigations.
In the most recent case, CAMERON BUTLER, age 33, of Baton Rouge, Louisiana, was indicted this week on six counts of receiving stolen government funds, in violation of Title 18, United States Code, Section 641. The indictment alleges that BUTLER obtained more than $100,000 in federal tax refunds, via electronic deposits to bank accounts he controlled, knowing that the refunds belonged to other taxpayers and that he was not entitled to the funds. If convicted, the defendant faces a significant term of imprisonment, fines, restitution, and the forfeiture of the proceeds from the alleged scheme.
This indictment follows the recent convictions of TA’SHA THOMAS, age 26, of Donaldsonville, Louisiana, and SHONDA V. JOHNSON, age 42, of Baton Rouge, Louisiana, both of whom have been convicted for their roles in an extensive stolen identity refund fraud scheme. On June 22, 2015, THOMAS pled guilty to access device fraud and aggravated identity theft. As THOMAS admitted, through her work at the Ascension Parish Health Unit, she gained access to personal identifying information of individuals in a database and sold the information to Mona Hill, who in turn used the information to file fraudulent federal tax returns, ultimately receiving more than $400,000 based on such returns. THOMAS admitted that, between January and August of 2012, she sold more than 400 access devices to Mona Hill in exchange for between $8,000 and $9,000.
Meanwhile, on July 1, 2015, JOHNSON pled guilty to three counts of receipt of stolen government property. As JOHNSON admitted, after Hill filed the fraudulent federal tax returns mentioned above, JOHNSON obtained several of the tax refunds, knowing that the refunds belonged to other taxpayers and that she was not entitled to the funds.
Mona Hill has been separately prosecuted and convicted by this office. Hill was sentenced to serve sixty-five months in federal prison and pay $491,268.18 in restitution to the IRS. THOMAS and JOHNSON are awaiting sentencing.
U.S. Attorney Green stated: “Our office will continue to dedicate ourselves to working with IRS-CI and our other partners to unravel complex fraud schemes involving identity theft and tax refunds. Such schemes prey on honest taxpayers and must be stopped. I greatly appreciate the dedicated efforts of the agents and prosecutors handling these important cases.”
“We will continue to work aggressively with the United States Attorney's Office to protect innocent taxpayers and preserve the integrity of our tax system” said Jerome R. McDuffie, Special Agent-in-Charge, IRS Criminal Investigation. “We will vigorously pursue fraudulent refund claims. Protecting taxpayers’ money and personal information will remain one of our core missions.”
This ongoing investigation is being prosecuted by Assistant United States Attorney Jessica M.P. Thornhill.
NOTE: An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.